October 26, 2023

9th Fiscal Period (Ended August 2023)
Financial Results Briefing Materials

AssetManagement
CompanySANKEI REAL ESTATE Inc.

Disclaimer
This document is for the purpose of providing information on SANKEI REAL ESTATE Inc. (hereinafter, “SANKEI REAL ESTATE”) and the information provided by thisdocument is not a disclosure document or asset management report pursuant to the Financial Instruments and Exchange Act, the Act on Investment Trusts andInvestment Corporations, associated Cabinet Orders, Cabinet Office Orders and Regulations and the Securities Listing Regulations of the Tokyo Stock Exchange.
Furthermore, this document was not prepared for the purpose of soliciting investment or recommending trading related to specific instruments. Please consult yourcompany for any purchase of SANKEI REAL ESTATE investment units. When making any investment, investors do so at their sole risk and discretion.
This document contains certain forward-looking statements on financial condition, management results and operations, statements on the plans and targets of Sankei
Building Asset Management Co., Ltd. (hereinafter, the “Asset Management Company”), which is the asset management company of SANKEI REAL ESTATE, andforward-looking statements and forecasts on future plans, management targets, strategies, etc. of SANKEI REAL ESTATE. These forward-looking statements are basedon information available to SANKEI REAL ESTATE and the Asset Management Company on the date of preparation of the document (or the relevant date if otherwise
specified in the document), and are based on certain suppositions and assumptions at the present time that were formulated based on multiple assumptions
concerning various internal and external environmental factors such as financial, economic, market, political and international conditions surrounding the operationsof SANKEI REAL ESTATE. However, there is no assurance that the above suppositions and assumptions are correct. Therefore, please be aware that such forwardlooking statements contain known and unknown risks and uncertainties that could cause the actual performance, management results, financial condition, etc. of
SANKEI REAL ESTATE to significantly differ from explicitly or implicitly stated forecasts. Therefore, this document does not provide any assurances of future
performance, investment results or fluctuations, etc., and actual results may differ significantly due to a variety of factors.
In addition to statements on SANKEI REAL ESTATE, this document contains diagrams and data, etc. prepared by the Asset Management Company based on
information provided to SANKEI REAL ESTATE and the Asset Management Company by a third party or information published by a third party, and contains analyses,
judgments and other views of SANKEI REAL ESTATE and the Asset Management Company on these. There may be different views on these, and SANKEI REAL ESTATEand the Asset Management Company may change their views in the future.
Careful attention has been given to the information provided in this document, but there are no assurances on the accuracy, fairness and completeness of theinformation regardless of information prepared by SANKEI REAL ESTATE or the Asset Management Company, or information received from a third party.
The content of this document may be changed or abolished without notice. SANKEI REAL ESTATE and the Asset Management Company do not have the obligation to
update or publish the content of this document (including forward-looking statements).

All rights to any part of this document belong to Sankei Building Asset Management, and no part of this document shall be used, cited, reproduced, altered,disassembled, transmitted, etc. by any means, electronic or mechanical, for any purpose without permission.
Please contact below if you have any inquiries concerning this document.

Sankei Building Asset Management Co., Ltd.
Finance & IR Department
Phone: +81-3-5542-1316

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SANKEI REAL ESTATE Inc.

Table of Contents

 Executive Summary… P3

 1. Financial Results and Management Highlights… P4

 2. Future Growth Strategy “Revival Plan”… P13

 3. Internal Growth Results and Strategy… P24

 4. Financial Strategy… P30

 5. ESG Initiatives… P34

 Appendix

… P37

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SANKEI REAL ESTATE Inc.

Executive Summary
Financial Results and Management Highlights

 In the 9th FP (ended August 2023), revenue decreased and profit increased compared with theforecast. DPU increased compared with the forecast (+41 yen)
 Portfolio rebalancing was implemented (March and August 2023) as a measure (first step) toachieve stable DPU.
■ Acquired two relatively new properties through sponsor support— “SANKEILOGI Settsu” → SANKEI REAL ESTATE’s first logistics facility— “S-GATE AKASAKA” (20% quasi co-ownership interest) → 100% ownership■ Sold part of quasi co-ownership interest in office building to the Sponsor— “BREEZÉ TOWER” (1.55% quasi co-ownership interest)→ Implemented measures to stabilize DPU through gain on sale

 Implemented renewal of SANKEI REAL ESTATE website (June 2023)
Future Growth Strategies

 Execution of “Revival Plan” [during 10th FP (ending February 2024)]■ Implementation of large-scale portfolio rebalancing (second step)■ Partial amendments to management guidelines (conversion to a diversified REIT)■ Additional acquisition of SANKEI REAL ESTATE’s investment units by the Sponsor* “DPU” refers to distribution per unit. The same applies below.

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SANKEI REAL ESTATE Inc.

1. Financial Results and Management Highlights

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SANKEI REAL ESTATE Inc.

Financial Results Highlights 9th Fiscal Period (Ended August 2023)
 Operating revenue for the 9th FP: 2,751 million yen (-3.4% from the forecast, -4.9% from the previous fiscal period) Operating income for the 9th FP: 1,334 million yen (+1.4% from the forecast, +7.3% from the previous fiscal period)
 DPU for the 9th FP: 2,418 yen (+41 yen from the forecast, +113 yen from the previous fiscal period)■ Financial Summary for 9th Fiscal Period (Ended August 2023)

Comparison with beginning- Comparison with previous
of-period forecast
fiscal period

Results

2,751 million yen
1,334 million yen
1,129 million yen
2,418 yen

Operating revenue
Operating income

Net income
DPU (distribution per unit)-3.4% -98 million yen+1.4% +18 million yen+1.7% +19 million yen+1.7%+41 yen-4.9% -140 million yen+7.3% +90 million yen+4.9% +52 million yen+4.9%+113 yen■ Change in DPU for 9th Fiscal Period (Ended August 2023)(Unit: yen per unit)

3,158

3,000

-27.0%

2,000

2,418

2,377

2,305

2,500

+1.7%

+3.1%

1,500
1,000
500
0
7th FP Results

8th FP Results

9th FP Forecasts(As of April 2023)

9th FP Results

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SANKEI REAL ESTATE Inc.

Financial Results Highlights

Summary of DPU for the 9th FP (Ended August 2023)

 +113 yen from the previous fiscal period due to the recording of gain on sale of real estate, etc.
through DPU stabilization measures■ Summary of DPU for the 9th FP (Ended August 2023)(Unit: yen per unit)

2,305

Rentalrevenue

Other
operatingexpenses

Damages from
Shinagawa usage

Recorded inprevious FP
Other revenue

・Previous period Shinagawa
settlement-544
・Previous period Nihonbashi
penalties-22

8th FP Result

Non-operating
income (loss)

Gain on sale ofreal estate, etc.

Other operating
income (loss)
from rent
business

Main breakdown
・Repair expenses
・Depreciation
・Property taxes
・Utilities balance

+500
-53
-26
+17

9th FP Result* The figures for changes shown in the bar chart are rounded to the nearest unit.

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SANKEI REAL ESTATE Inc.

Detailed Financial Results Highlights(Comparison with Forecast) 9th Fiscal Period (Ended August 2023)
 Operating income (loss) from leasing +8.5%, operating income +1.4% compared withthe forecast(Unit: million yen)Accounting period
Operating revenue
Total rent business revenue
Rental and CAM revenue

9th FP Forecasts (A)(as of April 2023)

9th FP Results (B)(August 2023)

Difference(B)-(A)

2,849

2,751

2,586

2,586

+0

2,255

2,343

+87

Major Factors for the Difference(98)

Shinagawa (+84) (recording of rent for cancellation penalties), Tokyo Sankei Building (+ 3) (increase in plaza revenue)

Parking revenue

32

33

+0

Utilities reimbursement

121

113

(7) Omori (-5), Hatchobori (-2), Akasaka (-2), Toyo (+1)

Other revenue

177

96

(80) Shinagawa (-84) (above late rent), Shinagawa (+1) (utilities penalties)

263

164

(98)

Gain on sale of real estate, etc.
Operating expenses

1,533

1,416

(117)

Total expenses related to rent
business

1,226

1,110

(115)

Outsourcing expenses

251

221

(30) Shinagawa (-31) (Leasing fees), Shinagawa (+4) (BM), Toyo (-2) (Leasing fees)

Utilities expenses

219

189

(30) BREEZÉ (-13), Omori(-6), Shinagawa (-4), Hatchobori (-3), Akasaka (-1)

Repair expenses

8937(52) Shinagawa (-20), BREEZÉ (-14), Miyazakidai (-5), Omori (-4)

Property taxes

312

313

+0

Depreciation

325

320

(4) BREEZÉ (-3)

Other expenses

26

27

+1

Operating income (loss) from rent
business

1,360

1,476

+115

Total other operating expenses

307

306

(1)

Asset management fee

241

245

+4

Other expenses

66

60

(6)

1,315

1,334

+18

0

0

+0

Operating income
Non-operating income
Non-operating expenses
Ordinary income
Net income
Distribution per unit (Unit: yen)
NOI
(Excluding gain on sale of real estate, etc.)

204

204

+0

1,111

1,130

+19

1,110

1,129

+19

2,377 yen

2,418 yen

+41 yen

1,685

1,797

+111

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SANKEI REAL ESTATE Inc.

Detailed Financial Results Highlights(Comparison with Previous Fiscal Period) 9th Fiscal Period (Ended August 2023)
 Comparison with previous fiscal period, rent business revenue (-10.5%),operating income (loss) from leasing(-4.9%), operating income including effect of gain on sale (+7.3%)(Unit: million yen)Accounting period
Operating revenue

Total rent business revenue
Rental and CAM revenue

8th FP Forecasts (A) 9th FP Results (B)(as of February 2023)(August 2023)

Difference(B)-(A)

Major Factors for the Difference

2,891

2,751

(140)

2,891

2,586

(305)

2,452

2,343

(109) (occurrence of rent)

Shinagawa (-200), Settsu (+98), Akasaka (+23) (additional acquisition), Toyo (-15), Omori (-14) (cancellation), Hibiya (+3)

Parking revenue

34

33

(0)

Utilities reimbursement

130

113

(16) Shinagawa (-16), Miyazakidai (+4), Omori (-4)

Other revenue

274

96

(178) (termination penalties of the previous FP)

0

164

+164

Gain on sale of real estate, etc.
Operating expenses

Shinagawa (-169) (settlement of restoration work in previous FP (-254), late rent (+84)), Nihonbashi-honcho (-10)

1,648

1,416

(231)

Total expenses related to rent
business

1,338

1,110

(228)

Outsourcing expenses

231

221

Utilities expenses

214

189

(24) BREEZÉ (-10), Shinagawa (-7), Miyazakidai (+4), Omori (-4), Hatchobori (-2), Hibiya (-2), Nihonbashi-honcho(-1)

Repair expenses

271

37

(233) Shinagawa (-237) (expenses for restoration work in previous FP)

Property taxes

300

313

+12

Shinagawa (+2), Hitachi Kyusyu (+1), HIbiya (+1), Hatchobori (+1)

Depreciation

296

320

+24

Settsu (+20), Akasaka (+2), Shinagawa (+1), BREEZÉ (-1)

Other expenses(9) Leasing fees (-12) (Shinagawa (-14), BREEZÉ (+2)), PM incentive (+2) (BREEZÉ (+5), Nihonbashi-honcho(-2))

25

27

+2

Operating income (loss) from rent
business

1,552

1,476

(76)

Total other operating expenses

309

306

(2)

Asset management fee

247

245

(1)

Other expenses
Operating income
Non-operating income
Non-operating expenses
Ordinary income
Net income
Distribution per unit (Unit: yen)
NOI
(Excluding gain on sale of real estate, etc.)

62

60

(1)

1,243

1,334

+90

1

0

(1)

168

204

+36

1,077

1,130

+53

1,076

1,129

+52

2,305 yen

2,418 yen+113 yen

1,849

1,797

(51)

Increase in borrowing expenses and interest paid due to property acquisition

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SANKEI REAL ESTATE Inc.

Management Highlights (External Growth)– Implemented portfolio rebalancing (first step) –March 2023: Acquired two relatively new properties through sponsor support
 Lowered office building investment ratio without lowering portfolio quality

SANKEILOGI Settsu
Acquisition price:
Approx. 5.2 billion yen

Sub assets
13.4%

S-GATE AKASAKA(20% quasi coownership interest)
Acquisition price:
1.4 billion yen

Sub assets
17.6%

Beforeacquisition
Office buildings
86.6%

After
acquisition

Sponsor support
Logistics facilities

Sponsor support
Office buildings

Office buildings
82.4%

August 2023: Sold part of quasi co-ownership interest in office building to the Sponsor
 Implemented DPU stabilization measures and lowered office building investment ratio

BREEZÉ TOWER(1.55% quasi co-ownershipinterest)
Sale price:
620 million yen

Utilized 164 million yen
gain on sale for DPU
stabilization measures↓
Impact on DPU+352 yen

Sub assets
17.7%

After
sale
Office buildings
82.3%

To second
step ofrebalancing
9

Office buildings

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SANKEI REAL ESTATE Inc.

Management Highlights (ESG-Related)– Implemented renewal of SANKEI REAL ESTATE website –June 2023: Implemented renewal of website

 Seeking to provide easily understandable information to investors and improve disclosure
1. Consolidated information on the latest updates on the top page
 Consideration given to convenience for both first-time viewers and high-frequency viewers
 Consolidated information on the latest updates such as “Latest information” “Distributions” and“Occupancy rate” on the top page
 Clicking the scroll button on the bottom right displays “Portfolio” and “Latest Financial
Materials”

Placed scroll button

2. Support for “Individual Investors” (Established dedicated page (Japanese page))

3.Sustainability response Established new dedicated sustainability
page Support for European sustainable financedisclosure regulations (English page) Established dedicated page. Contents icons implemented for pages of individual content, andinformation on SANKEI REAL ESTATE is provided by clicking the icons in sequence In addition to the dedicated page, we sought to provide ease of understanding by including
diagrams in explanations
Example of other page

Dedicated page (Japanese page)

Before renewal

After renewal

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SANKEI REAL ESTATE Inc.

Earnings Forecast (DPU Summary) DPU forecast for the 10th FP (ending February 2024): 2,050 yen, -15.2% (-368 yen) from the 9th FP
No change from April forecast. Large-scale portfolio rebalancing calculated based on certain assumptions

 DPU forecast for the 11th FP (ending August 2024): 2,113 yen, +3.1% (+63 yen) from the 10th FP
Assumes new portfolio mitigating and eliminating materialized risk of the current portfolio(Unit: yen per unit)
・Properties sold -436
・New properties +124
・Properties held +21

Other
operatingexpenses

Rentalrevenue

Rentalrevenue

Late rent
penalties for
Shinagawa in theprevious FP

Other Operating
income (loss)
from rent
business

Other
operatingexpenses

Nonoperating
income(loss)

Expected gain orloss on sale ofreal estate, etc.

Nonoperating
income(loss)

Other Operating
income (loss)
from rent
business

Expected gain orloss on sale ofreal estate, etc.

・Outsourcing expenses +265
・Repair expenses+110
・Utilities balance+108
・Property taxes+103
・Depreciation+58

・Repair expenses-106・Outsourcing expenses -38
・Property taxes+38

・ May fluctuate due to the
management status of theoverall portfolio including
candidate properties foracquisition in the “Revival Plan”

9th FPDPU Result* The figures for changes shown in the bar chart are rounded to the nearest unit.

10th FPDPU Forecast

11th FPDPU Forecast

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SANKEI REAL ESTATE Inc.

Forecast (Unabridged)
 DPU forecast for the 10th FP (ending February 2024): 2,050 yen -15.2% (-368 yen) from the 9th FP.
 DPU forecast for the 11th FP (ending August 2024): 2,113 yen +3.1% (+63 yen) from the 10th FP.
(Unit: million yen)Accounting period
Operating revenue

9th FP Result (A)(August 2023)

10th FP Forecasts (B)(February 2024)

Difference(B)-(A)

11th FP Forecasts (C)(August 2024)

Difference(C)-(B)

Major Factors for the Difference

2,751

2,613

(137)

2,337

(276)

2,586

2,353

(233)

2,337

(15)

2,343

2,207

(135)

2,207

(0)

Parking revenue

33

28

(5)

24

(3)

Utilities reimbursement

113

107

(6)

96

(11)

Other revenue

96

10

(85)

9

(0)

Gain on sale of real estate, etc.

164

260

+96

0

(260)

1,416

1,463

+46

1,155

(307)

・Outsourcing expenses (+17) (Existing properties (+11) (Toyo (+6)、Omori (+3)), Properties sold (+6))

1,110

1,144

+34

821

(323)

・Utilities expenses (-14) (Properties sold (-14))

Outsourcing expenses

221

239

+17

115

(123)

・Repair expenses (+49) (BREEZÉ (+30), Hibiya (+4), Omori (+4), Shinagawa (+3))

Utilities expenses

189

175

(14)

113

(61)

・Property taxes (-17) (Properties sold (-14))
・Depreciation (-6) (Properties sold (-19), New properties (+11))

Total rent business revenue
Rental and CAM revenue

Operating expenses
Total expenses related to rent
business

10th FP Forecasts (Comparison with 9th FP)
Rent business revenue (-233 million yen)・Rent (-135) (Properties sold (-203) (Shinagawa, BREEZÉ), New properties (+58)
Existing properties (+9) (Settsu (+19), Akasaka (+4), Nihonbashi (+6),
Omori (-11), Akihabara (-6)))・Other revenue (-85) (Damages from Shinagawa usage (-84))

Expenses related to rent business (+34 million yen)Repair expenses

37

86

+49

35

(51)

Property taxes

313

295

(17)

247

(48)

Depreciation

320

314

(6)

287

(27)

Other expenses

27

33

+5

22

(10)

Operating income (loss) from rent
business

1,476

1,208

(267)

1,516

+307

・Rent (-0) (Properties sold (-429), New properties (+439)

Total other operating expenses

306

318

+12

334

+15

Existing properties (-19) (Omori))

Asset management fee

245

244

(1)

259

+15

Other expenses

60

74

+13

74

+0

1,334

1,150

(183)

1,182

+31

Operating income

11th FP Forecasts (Comparison with 10th FP)
Rent business revenue (-15 million yen)・Utilities revenue (-11) (Properties sold (-20), New properties (+7))

Expenses related to rent business (-323 million yen)

Non-operating income

0

0

(0)

0

±0

・Outsourcing expenses (-123) (Properties sold (-128), New properties (+11))

Non-operating expenses

204

192

(12)

194

+2

・Utilities expenses (-61) (Properties sold (-70))

1,130

958

(172)

987

+29

・Repair expenses (-51) (Properties sold (-53))
・Property taxes (-48) (Properties sold (-69))

Ordinary income
Net income
Distribution per unit (Unit: yen)NOI
(excluding gain on sale of real estate, etc.)

1,129

957

(172)

986

+29

2,418 yen

2,050 yen(368 yen)

2,113 yen

+ 63 yen

1,797

1,523

(273)

1,803

+280

・Depreciation (-27) (Properties sold (-104), New properties (+73))

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SANKEI REAL ESTATE Inc.

2. Future Growth Strategy “Revival Plan”

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SANKEI REAL ESTATE Inc.

SRE

About the Revival Plan

REVIVAL PLAN

 We aim for a revival into a REIT capable of sustained growth by implementing three major plans
through collaboration with the Sponsor
1. Objectives<Internal environment>- Mitigation of and elimination of materialized risk in the portfolio (rebuilding revenue structure)- Seek to further improve investor value- Mitigate and eliminate risks, and seek to realize stable DPU (distributions per unit)<External environment>- Transformation into portfolio matching structural changes in office demand- Revival into a REIT capable of sustained growth
2. Plan outline
I. Large-scale portfolio rebalancing
II. Partial amendments to management guidelines (conversion to a diversified REIT)
III. Additional acquisition of SANKEI REAL ESTATE’s investment units by the Sponsor

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SANKEI REAL ESTATE Inc.

SRE

I. Large-scale Portfolio Rebalancing

REVIVAL PLAN

<Second step of rebalancing> Large-scale portfolio rebalancing (granting/acquiring preferential negotiation rights)
Two candidate properties for sale ⇔ Three or more candidate properties for acquisition (being arranged) based onsponsor’s branding strategy
Candidateproperties for sale

Candidateproperties for acquisition

A-2

BREEZÉ TOWER (100% ownership)

Asset
replacement

Hotel Intergate Kyoto Shijo Shinmachi

Hotel Intergate Kanazawa

A-8

Being arranged

Shinagawa Seaside TS Tower (100% ownership)

Grids Premium Hotel Osaka Namba* The candidate properties for sale and acquisition are as of the date of this document. No sale or acquisition has been decided, and there is no assurance any acquisition will be made. The same applies below.

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SANKEI REAL ESTATE Inc.

SRE

I. Large-scale Portfolio Rebalancing

REVIVAL PLAN

<Second step of rebalancing> Overview of candidate properties for acquisition
Value experience-type hotel “Intergate Hotels”“Intergate Hotels” is a hotel brand developed by Sankei Building and operated and managed
by its group company GRANVISTA Hotels & Resorts.

Hotel

Hotel Intergate Kyoto Shijo Shinmachi

 First in the series, located well in a quiet area a
5-minute walk from Karasuma Station
Location

Nakagyo-ku,
Kyoto-shi

Construction
November 2017
completion
Total floor area 6,029.40 m²
Steel Construction,
Structure / size
5 floors above groundNumber of153
rooms
GRANVISTA Hotels &Operator
Resorts
Hotel

Hotel Intergate Kanazawa

 Fourth in the series, in a good location with famous tourist
spots such as Kenrokuen and Omicho Market accessible byfootLocation

Lifestyle-type hotel“GRIDS”

GRIDS is a hotel based on the concept of “THETRAVELLERS’ HUB: connecting travels, people and hearts”
where it is easy for visiting guests to find new enjoyment
and connections while coming in contact with Japanesetradition and culture.
Hotel

Grids Premium Hotel
Osaka Namba

 New series “GRIDS”
First lifestyle-type hotel
Location

Naniwa-ku,
Osaka-shi

Construction
January 2021
completion
Total floor area 4,353.79 m²
Steel Construction,
Structure / size 11 floors above
groundNumber of142
rooms
Operator
AB Accommo

Takaokamachi,
Kanazawa-shi

Construction
January 2019
completion
Total floor area 5,177.73 m²
Steel Construction,
Structure / size 12 floors above
groundNumber of
166
rooms
GRANVISTA Hotels &Operator
Resorts

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SRE

II. Partial Amendments to “Asset Management Guidelines”

REVIVAL PLAN

 Conversion from office building-focused REIT to diversified REIT
1. Reason for the Amendmentsi.

Response to expected structural change in office demandii. Necessity for creating a portfolio capable of sustainable growth

2. Details of Major Amendments(1) Conversion to a diversified REIT
Conversion to a diversified REIT to realize a portfolio that adapts to market cycles and is equipped with both upside
potential and protection against downsides(2) Revision of investment policyi.

Asset type diversification: Change to asset type category and investment ratio
For the purpose of accurately capturing new revenue opportunities, the investment policy will be changed so that theminimum investment ratio in “office buildings,” which had previously been our main assets, will be reduced to 50%,
while the maximum investment ratio for “sub assets,” previously positioned as secondary assets, will be increased to
50% as a core asset group(*). (*Core asset group: Hotels, logistics facilities, residential facilities)

ii. Geographic diversification: Review of geographic area subject to investment
Expand the scope of geographic area subject to investment from the perspective of geographic diversificationaccording to the diversification of asset type categories(3) Clarifying ESG investment posturei.

Clarification of investment in properties that have obtained or are able to obtain environmental certification

ii. Appropriately reflect the decisions of the Asset Management Company’s Sustainability Promotion Committee in theinvestment decision process
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SANKEI REAL ESTATE Inc.

SRE

II. Partial Amendments to “Asset Management Guidelines”

REVIVAL PLAN

 Change of investment policy
Before amendment

After amendment
Investment ratio

Asset typediversification

Office buildings

80 Approx. %Investment ratio

Office buildings
Hotels

Logistics facilities
Sub assets

20

30-50 Approx. %Approx. %Residential facilities (Note 1)
Other (Note 2)
Investment ratio

Geographic area
diversification

50-70 Approx. %Up to 10 Approx. %Investment ratio

Greater Tokyo, Osaka City, Nagoya City

70％ or more

Greater Tokyo, Greater Osaka (Note 3),
Greater Nagoya (Note 4)

70 % or more

Cities designated by government ordinance, core cities
and major regional cities

30％ or lessCities designated by government ordinance,core cities and major regional cities

30 % or less

Note 1: Asset types with residential and other functions, such as residences, student residences, andhealthcare facilities
Note 2: Asset types other than office buildings, hotels, logistics facilities, and residential facilities
Note 3: Refers to Osaka, Hyogo and Kyoto prefectures, limited to cities designated by government ordinance,core cities, and major regional cities within each prefecture
Note 4: Refers to Aichi, Gifu, and Mie prefectures, limited to cities designated by government ordinance, corecities, and major regional cities within each prefecture

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SANKEI REAL ESTATE Inc.

SRE

II. Partial Amendments to “Asset Management Guidelines”

REVIVAL PLAN

 Urban development business based on sponsor’s branding strategy
Office buildings
High-grade mid-sized office buildings realizing “high-spec x mid-size”

HotelsValue experience-type hotels providing connections
with the region and people, and the experience ofvalues with “five senses” based on the concept of“hotels delivering the ultimate morning”
A lifestyle-type hotel
series providing a tasteof premium timeenveloped in a relaxed
sense of high quality[S-GATE official website]
https://www.s-gate-office.com/[INTERGATE HOTELS official website]

https://www.intergatehotels.jp/ https://gridshotel.com/group/
Residential
facilities

Logistics facilities
The SANKEILOGI logistics
facilities plan to increasecargo storage efficiency andflexibly adapt to split usage,in addition to paying
attention to the entrance andcommon area, with the aim ofcreating facilities that are
comfortable for the people
working there.

Nine buildings under development* Including renewal properties
Including logistics facilities other than “SANKEILOGI”[GRIDS official website]

Rental residences developedby Sankei BuildingHomes bringing freedom to living.

Elderly facilities
Sankei Building Well Care[LEFOND PROGRES official website][Sankei Building Well Care official website]

https://www.lefond.jp/progres/https://www.sankeiwellcare.com/
19* The properties shown on this page are not assets under management of SANKEI REAL ESTATE as of the date of this document,
decisions on their acquisition have not been made, and there are no assurances that they will be.

19

SANKEI REAL ESTATE Inc.

SRE

II. Partial Amendments to “Asset Management Guidelines”

REVIVAL PLAN

 Sponsor’s Main Development Results and Plans
Residential
facilities
LEFOND’s new business type LEFOND ETUDE (student residences)

S-LINKS Shibuya(S-LINKS)- Providing safe and secure homes.
- A place for learning about society.
- A place for nurturing the environment.

A mixed-use facility connecting housing,work, healthcare and commerce was createdin Aobadai, Meguro-ku, connecting the areasof cutting-edge information and culture inTokyo such as Shibuya, Daikanyama andNakameguro.

S-LINKS Shibuya official website
https://www.sankeibldg.co.jp/s-linksshibuya/
Overview

Under Development
Property name
LEFOND ETUDE
Kanamachi
LEFOND ETUDE
Kameari
LEFOND ETUDE
Kokubunji

Planned Total floor
Locationcompletion
area
Kanamachi, Katsushika-ku,
Approx.
January 2024
Tokyo
2,719 m²
Kameari, Katsushika-ku,
Approx.
March 2024Tokyo
2,297 m²
Honcho, Kokubunji-shi,
Approx.
March 2024
Tokyo
2,065 m²

Building structure/
Numbernumber of floorsof units
Reinforced Concrete Construction,
113
14 floors above ground
Reinforced Concrete Construction,95
11 floors above ground
Reinforced Concrete Construction,95
13 floors above ground

Location

Meguro-ku, Tokyo

Construction
completion

November 2022

Total floor area

9,889.78 m²

Structure/ size

Reinforced concrete construction,
1 floor below ground and 18 floors
above ground

Under Development *Joint project

Logistics facilities

Property nameMinamisuita Logistics Project (tentative name)*
Komaki-kita Logistics Project (tentative name)*
Nagaokakyo Logistics Project (tentative name)*

Location

Minamisuita, Suita-shi,Osaka
Fuso-cho, Niwa-gun,
Aichi
kotaritenyaku, Nagaokakyo-shi,
Kyoto

Plannedcompletion

December 2023
March 2024
April 2024

Total floorarea
Approx.
86,422 m²
Approx.
43,706 m²
Approx.
15,355 m²

SANKEILOGI Fuchu

Musashidai, Fuchu-shi,Tokyo

September 2024

Approx.
39,617 m²

Bando Logistics Project (tentative name)Koshindaira, Bando-shi,
IbarakiDecember 2024
RenewalApprox.
15,736 m²

Toda Logistics Project (tentative name)

Sendai-Izumi Logistics Project (tentative name)
Chiba-shi Shinminato Logistics Project(tentative name)*
Kasukabe Logistics Project (tentative name)

Kizawaminami, Toda-shi,
SaitamaKamisakuragi, Tomiya-shi,
Miyagi
Shinminato, Mihama-ku, Chiba-shi,
Chiba
Shimoyanagi, Kasukabe-shi,
Saitama* The properties shown on this page are not assets under management of SANKEI REAL ESTATE as of the date of this document,
decisions on their acquisition have not been made, and there are no assurances that they will be.

March 2025

October 2025
Winter, 2025
March 2026

Approx.
10,519 m²
Approx.
14,831 m²
Approx.
53,934 m²
Approx.
12,222 m²

Building structure/
number of floors
Steel Construction,
5 floors above ground
Steel Construction,
2 floors above ground
Reinforced concrete steel-frame,
4 floors above ground
Reinforced concrete and Steel
Construction,
4 floors above ground
Warehouse: Steel Construction,
2 floors above ground
Office: Steel Construction,
3 floors above ground
Steel Construction,
4 floors above ground
Steel Construction,
4 floors above ground
Steel Construction,
4 floors above ground
Steel Construction,
4 floors above ground20

SANKEI REAL ESTATE Inc.

SRE

II. Partial Amendments to “Asset Management Guidelines”

REVIVAL PLAN

 Asset type diversification after large-scale portfolio rebalancing (image)
Candidateproperties for acquisition
Being arranged

3 hotels+αCore asset group
Hotels
Logistics facilities
Residential facilities

Sub assets

30-50%

Sub assets

17.7%

26.3%

Now

Sale

After sale

Acquisition*
Office buildings

After rebalancing(Image)Office buildings

82.3%

73.7%

Candidateproperties for sale

Office buildings* If two candidate properties for sale are sold(acquisition price basis)

Two office properties

50-70%

21

21

SANKEI REAL ESTATE Inc.

SRE

III. Additional Acquisition of SANKEI REAL ESTATE’s Investment Units by the Sponsor

REVIVAL PLAN

 The Sponsor has expressed a strong commitment to the Revival Plan being executed by SANKEIREAL ESTATE. The Sponsor has re-clarified its stance of support for SANKEI REAL ESTATE
1. Details of consideration of additional acquisition after receiving notice from the Sponsor(1) Total number of investment units to be acquired (planned)

・Up to 46,652 units (approx. 10.0% of the number of investment units issued and outstanding)* If the price of the investment units exceeds the initially set maximum price during the acquisition period, the maximum number of units to beacquired may not be reached or the acquisition may not take place at all.

・Combined with the number of units currently held (17,479 units), up to 64,131 units(approx. 13.7% of thenumber of investment units issued and outstanding)(2) Acquisition period (planned)

・Planned to be up to 220 business days from a date decided by the Sponsor between October 16, 2023, andFebruary 29, 2024
* It may be terminated during the period if the number of investment units acquired reaches the maximum number of investment units,
or in other circumstances* The date and period (the final acquisition day) will be determined according to approval by the Sponsor at a later date(3) Acquisition method (planned)
The Sponsor will acquire SANKEI REAL ESTATE’s investments units through open market purchases in accordancewith a sale transaction agreement to be entered into with a securities company

2. Significance of additional acquisition
・ The intention to make the additional acquisition shows the Sponsor’s firm commitment to the Revival Plan being executed by SANKEIREAL ESTATE, reaffirming the Sponsor’s position as a supporter of SANKEI REAL ESTATE.
・ Further same-boat investment by the Sponsor aligns the interests of the unitholders of SANKEI REAL ESTATE with those of theSponsor. Support from the Sponsor is expected to lead to not only the steady execution of the Revival Plan but also SANKEI REALESTATE’s sustainable growth.
22

SANKEI REAL ESTATE Inc.

MEMO

23

SANKEI REAL ESTATE Inc.

3. Internal Growth Results and Strategy

24

SANKEI REAL ESTATE Inc.

Internal Growth Results■ Change in Rent Gap for Office Buildings■ Change in Occupancy Rate
100.0% 100.0% 100.0%

99.9%

98.2%

99.1%

100.0%

94.2%

0%

93.4%

-1.5%

85.6%

90.0%

-4.4%

80.0%

-10%

-2.9% -2.6%

-8.5%

70.0%
60.0%

+0.8%

-12.0%～～-14.4%

50.0%0August February August February August February August February August
2022
2023
2022
2023
2021
2020
2021
2020
2019

-20%

-15.9%

August February August February August February August February August
2022
2023
2022
2023
2021
2020
2021
2020
2019
After the COVID-19 pandemic (March 2020)

After the COVID-19 pandemic (March 2020)■ Change in Portfolio’s Actual NOI Yield and Office Buildings Average Rent Unit Price
Actual NOI yield (left axis)
Bar graph: Average unit price for office building rent (right axis)

4.3%

4.5%

4.0%

4.5%

19,329 yen

19,965 yen

4.0%

4.0%
3.5%

4.4%

4.2%

(yen)
21,000

4.3%

20,0003.8%
3.5%

18,486 yen
17,992 yen
17,523 yen

3.0%

17,039 yen

17,315 yen

18,00016,989 yen

2.5%

16,718 yen

New acquisitionof 4 properties
September 2021

2.0%

～
～

～
～
0%
August 2019

February 2020

August 2020

February 2021

August 2021

February 2022

17,00016,0001.5%
1.0%

19,000August 2022

February 2023

August 2023

15,0000
14,000After the COVID-19 pandemic (March 2020)

25

SANKEI REAL ESTATE Inc.

Internal Growth Results– Rent Revision Performance of Office Buildings (Based on Contracts Signed) – Prioritize the reduction of risk of tenants downsizing/moving out while achieving revisions withincrease in rent for some tenants■ Rent Revision Performance of Office Buildings (Based on Rental Area)
Percentages of rent revision results (bar graph)
100%

27.1%

25.8%
Increase

18.5%

75%
50%

74.9%

12.7%

Increase

Increase

98.3%

10.2%
73.0%

Increase

Number oftargeted tenants
Targeted leasedarea

No change

31.4%

7.0%

4.7%
Increase

30%

81.3%

96.2%

95.2%

20%

No change

No change

5.2%

57.3%

No change

Rate of increase

6.1%

No change

10%

4.3%

0.0%

0%

No change
0.1%
Decrease

1.7%
No change

1.2%
Decrease

7.6%
Decrease

FP endedAugust 2019

FP endedFebruary 2020

FP endedAugust 2020

FP endedFebruary 2021

FP endedAugust 2021

FP endedFebruary 2022

9 cases

24 cases

30 cases

27 cases

13 cases

11 cases

369 tsubos

0.1%
Increase
65.8%
Increase

34.1%
No change
0.1%
Decrease

25.1%
No change

0%

35.1%
Increase

68.5%

25%

Rate of rent increase (line graph)

3,144 tsubos 4,165 tsubos 2,769 tsubos 1,195 tsubos 1,725 tsubos

18.7%
Decrease

3.7%
Decrease

0.0%
Decrease

FP endedAugust 2022

FP endedFebruary 2023

FP
FP ended
ended
AugustAugust 2023
2023

17 cases

24 cases

30 cases

705 tsubos-10%2,600 tsubos 10,885 tsubos

After the COVID-19 pandemic (March 2020)■ Rent Revision Performance of Office Buildings (Based on Number of Cases)

Overall
Decrease
2 cases
6.7%
Increase
12 cases
30 cases 40.0%
No change
16 cases

53.3%

By Contract Form
Fixed-term
Decrease
2 cases
7.7%
Increase
12 cases
26 cases 46.2%
No change
12 cases
46.2%

Ordinary
No change
4 cases

4 cases
100%

OfficeBy UseDecrease
1 case3.7%

Increase
12 cases
No change 27 cases
44.4%

14 cases
51.9%

RetailDecrease
1 case33.3%

No change

3 cases 2 cases
66.7%

26

SANKEI REAL ESTATE Inc.

Internal Growth Results■ Rent Revision Examples
A-1

Tokyo Sankei Building

A-10

S-GATE AKASAKA
Additional acquisition in March 2023
(to 100% interest)

Flexibly respond to tenants with arisk of downsizing or moving out

During the softening of theoffice market, relations withmajor tenants have paid off,
resulting in renewal ofcontracts with the same
conditions

Revise with slight decreases or
the same rent
Prioritize maintaining theoccupancy rate

■ Lease-Up Status
A-2

BREEZÉ TOWER

One vacant floor (approx. 406 tsubos)
was divided in four and filled in ashort period.
<Occupancy rate: Leased area basis>
96.7% (End of September)↑
90.7% (End of February)

A-8

Shinagawa Seaside TS Tower

Status of lease agreements
i. December 2022 : 2 floors occupied
Contracts concluded
ii. August 2023:
for 2.5 floors
Contracts concluded
iii. September 2023 :for 4 floors<Occupancy rate: End of September>Leased area basis: 9.6%
Contracted area basis: 41.1%27

SANKEI REAL ESTATE Inc.

Internal Growth Strategy– Aiming to Achieve Results That Drive Stable Medium- to Long-term Operation –■ Scheduled Renewal with Contract Revision/Renewal and Progress(Targeting Office Buildings)
Contract revision/renewal planned area is as of the end of the 9th FP
Renewal with contract revision/renewal is based on contracts signed (applicable to tenant contracts signed asof the end of August 2023)
Ending February2024(10th FP)

166 tsubos
Progress rate 13.3%

1,251 tsubos(5.9%)

Ending August2024(11th FP)

223 tsubos
Progress rate 2.4%

9,315 tsubos(43.9%)

0 tsubos

2,000 tsubos

4,000 tsubos

6,000 tsubos

8,000 tsubos 10,000 tsubos 12,000 tsubos

契約更改・更新済面積
Contract revision/renewal area
契約更改・更新予定面積（総賃貸面積に占める割合）
Contract revision/renewal planned area (ratio to total leased area)

Two candidate properties for sale soldEnding February2024(10th FP)Ending August2024(11th FP)
0 tsubos■ Assumed Occupancy Rate of Portfolio(Two candidate properties for sale sold)10th FP (ending February 2024)
・End of period
96.0%
・Period average 87.9%
11th FP (ending August 2024)
・End of period
97.4%
・Period average 96.9%■ Implementation of Strategic Leasing With the basic policy to reduce the risk of tenants moving,negotiations will be made for rent increase with tenants witha rent gap (especially for tenants under fixed-term leases) Diversify leasing periods, advance cancellation notices,
switch the form of contracts (from ordinary leases to fixedleases) and diversify tenants■ Leasing Measures (Priority Properties)
1,215 tsubos(7.0%)

130 tsubos
Progress rate 10.7％

4,000 tsubos

Toyo Park Building

A-9

Omori Park Building

8,942 tsubos(51.5%)

223 tsubos
Progress rate 2.5％
2,000 tsubos

A-7

6,000 tsubos

8,000 tsubos 10,000 tsubos 12,000 tsubos

契約更改・更新済面積
Contract revision/renewal area
契約更改・更新予定面積（総賃貸面積に占める割合）
Contract revision/renewal planned area (ratio to total leased area) Turn up needs for nearby relocation(increased or decreased floor space) Actively capture short-term leases

 Flexibly respond to FR
 Catch up with tenants aiming to
reduce office costs

28

SANKEI REAL ESTATE Inc.

MEMO

29

SANKEI REAL ESTATE Inc.

4. Financial Strategy

30

SANKEI REAL ESTATE Inc.

Financial Strategy – Financial Highlights (1) –With the acquisition of two new properties, the LTV ratio increased temporarily. However, under a medium-term view, it will
cruise around the level of normal operation (45-50%)
Depending on the trends of interest rates, some loans will be implemented with floating interest rates, but no change will beseen in the policy to improve and stabilize the financial base

 Financial Highlights (as of September 29, 2023)
Balance of interestbearing liabilities

 LTV Ratio During Normal Operations

56.6 billion yen

LTV ratio

Ratio of long-term
debt

75.3%

Ratio of fixed-rate
debt

78.3%

Average financing
interest rate

0.5%

Average remaining
time to maturity

2.3 years

End of the 9th FP End of the 10th FP

50.6%
LTV ratio

50.8％

End of the 11th FP

50.2%

47.2%

(Forecast)(Forecast) Lender Composition (as of September 29, 2023)[Unit: million yen]

■ Distribution Map of Average Financing Interest Rates and Average

Percentage

Mizuho Bank

18,90033.4%

Sumitomo Mitsui Banking

9,100

16.1%

1.0

Development Bank of Japan

7,700

13.6%

0.9

Mizuho Trust & Banking

4,640

8.2%

0.8

Sumitomo Mitsui Trust Bank

4,500

8.0%

0.7

SBI Shinsei Bank

4,080

7.2%

0.6

Resona Bank

3,780

6.7%

Aozora Bank

2,000

3.5%

The Nishi-Nippon City Bank

1,000

1.8%

Remaining Time to Maturity of Office J-REITs(%)

Average financing interest rate

Borrowingamount0.5(as of September 30, 2023)

SANKEI REALESTATE

0.4
0.3

Kansai Mirai Bank

600

1.1%

0.2

Chiba Bank

300

0.5%

56,600100.0%

2

3

4

5

6

11 banks in total

Average remaining time to maturity (year)

31

SANKEI REAL ESTATE Inc.

Financial Strategy – Financial Highlights (2) – Will implement loans based on funding uses and the future of SANKEI REAL ESTATE while monitoring interest
rate trends, etc.
1) Refinancing 10th FP → 15th FP (period of 2.6 years) (September 2023)
2) 400 million yen of the early repayment out of the loan executed in March 2023 (6.8 billion yen) in association with thepartial sale of BREEZÉ TOWER (September 2023)

 Promote the distribution and prolongation of the maturity ladder Maturity Ladder for Interest-Bearing Liabilities (as of September 29, 2023)
1) Refinanced borrowings due in the 10th FP (September 4, 2023)
5.9 billion yen at a floating interest rate, 2.6 years(to be repaid in the 15th FP)

 Refinancing results for the 9th FP
3.7 billion yen at a fixed interest rate, 4.5 years(to be repaid in the 18th FP)(Unit: million yen)

10,0004002) Executed early repayment(Sep. 29, 2023)

7,500
6,400

Repayment amount:
400 million yen

5,900

5,000

6,200

5,900

2,500

4,300

3,700

4,800

6,200

5,900

4,300

5,600
3,700

3,300

0
9th FP

10th FP

11th FP

12th FP

13th FPLong-term borrowing

14th FP

15th FP

Short-term borrowing

16th FP

17th FP

18th FP

19th FP32

SANKEI REAL ESTATE Inc.

MEMO

33

SANKEI REAL ESTATE Inc.

5. ESG Initiatives

34

SANKEI REAL ESTATE Inc.

ESG Initiatives (1)■ Topics
 Promotion of acquisition of environmentally friendly properties (March 2023)
B-3

SANKEILOGI Settsu- Sponsor brand
Logistics facilities
SANKEILOGI Series-

Rooftop solar panels

-

A-10

Equipped with a rooftop solar power system(Facility capacity: 90kW)
It enables captive consumption within the facility
Operates autonomously using solar power in the event of apower outage
Application of LED lights
Space secured for emergency power generation systems

S-GATE AKASAKA- Sponsor brandMid-sized office building
S-GATE Series- Additional acquisition ofproperties that have obtained
environmental certification
Rooftop garden

 SANKEI REAL ESTATE renewed its website (June 2023)
 Continued participation in GRESB Real Estate Assessment (October 2023)
Obtained “2 Star” and “Green Star” GRESB ratings in FY2023

 Status of installation of LED lighting at tenant turnover- 9th FP (ending August 2023):
Installation at BREEZÉ TOWER, Tokyo Sankei Building, Toyo Park Building- 10th FP (ending February 2024): Plan to implement in BREEZÉ TOWER and Miyazakidai Garden Office(common area)■ Future Initiatives
 Promoting acquisition of environmental certification for owned assets (BELS, DBJ Green Building, CASBEE, etc.)
 Considering installation of EV charging stations at owned assets
 Promotion of introduction of “LUUP,” a share service for electric micromobility(4 properties at present)* “LUUP” is a service that allows users to share electric kickboards and electric bicycles via smartphone.

35

SANKEI REAL ESTATE Inc.

ESG Initiatives (2)■ Various Rules Associated with ESG
Sustainability Policy

Sustainability Promotion System••(1) Preserving the Earth environment and reducing theenvironmental load of assets under management(2) Serving the local community(3) Cooperating with external stakeholders(4) Working with executives and employees(5) Observing compliance and establishing/maintaining aninternal control system(6) Disclosing ESG information and securing transparency

•

•
•
•
•

Sustainability Promotion System •Rules•
Energy Conservation Policy•
GHG Emissions Reduction Policy
Policy on sustainable procurement

Water Conservation Policy
EMS operational manual
Policy on climate change
and resilience■ Social■ Environment

 Relationship with Stakeholders

Energy consumption reduction targets

 Long-term target 1: Reduce annual energy consumption intensity within the scope
managed by the owner by 5% from the base year (2019) by 2025
 Long-term target 2: Reduce annual energy consumption intensity within the scope
managed by tenants by 1% from the base year (2019) by 2025

GHG emission reduction targets<Scope 1 + Scope 2>
 The single-year target is to reduce energy consumption intensity by 1% comparedwith the previous year for Scope 1 + Scope 2
 Reduce by 5% from the base year (2019) in the medium
to long term (5 years)<Scope 3>
 Reduce by 1% from the base year (2019) in the medium
to long term (5 years)[Example: Tokyo Sankei Building]Launched official LINE account＼Looking for friends!／■ Governance The Asset Management Company published a report of its fiduciary
duty policy (policy for Customer-Oriented Business Conduct)(Updated annually in June) Plan to intensify same-boat investment by the Sponsor

FP ended August 2023

Number of investment units
issued and outstanding
467,099 units

Status of environmental certificates
Evaluation
ranking

Year ofissuance

Tokyo Sankei Building

★★★★

2021

BREEZÉ TOWER

★★★★

2021

S-GATE NIHONBASHI-HONCHO

★★★★

2022

S-GATE AKIHABARA

★★★

2022

S-GATE AKASAKA

★★★

2020

Hotel Intergate Tokyo Kyobashi

★★★★

2021

Hotel Intergate Hiroshima

★★

2021

Shinagawa Seaside TS Tower

★★★★★

2023

Property nameInternal regulations, policies, etc.

Chief Sustainability Officer: Executive Deputy President
Sustainability Officer: General Manager, Sustainability
Promotion OfficeSustainability Promotion Committee: Examining and planningvarious policies, targets, and measures related to sustainability

Number of units
held by Sponsor

Percentage of units
held by Sponsor

17,479 units

3.74%■ Contributions to SDGs (Sustainable Development Goals)
Acquired DBJ Green
Building Certification

Acquired BELS
evaluation

Acquired CASBEE
certification

SANKEI REAL ESTATE’s efforts have contributed to the following SDGs.
Goal 3: Ensuring prevention of the spread of infectious
diseases, flexible work styles
Goal 7: LEDs, solar power, reduction of heat load
Goal 8: Rooftop terraces (worker-friendly buildings)
Goal 11: Green Building certification, seismic dampers,
stockpiles
Goal 12: Appropriate treatment and recycling of industrial
waste
Goal 13: Disaster countermeasures, intake of people having
difficulty returning home36

SANKEI REAL ESTATE Inc.

Appendix

37

SANKEI REAL ESTATE Inc.

Balance Sheet (Unabridged) for the Fiscal Period Ended August 2023 (9th FP)(Unit: thousand yen)
8th FP
9th FP(as of Feb. 28, 2023) (as of Aug. 31, 2023)

8th FP
9th FP(as of Feb. 28, 2023) (as of Aug. 31, 2023)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Lease and guarantee deposits
Total investments and other assets
Total non-current assets
Deferred assets
Investment unit issuance costs
Total deferred assets
Total assets

5,208,842
3,097,656
64,47862,7958,433,772

5,687,713
2,649,835
62,64578,865
166,96382
8,646,106

182,520(25,525)
156,995
544
(67)
476
2,457,766
18,955,810(1,879,113)
17,076,697
71,171

189,040(29,088)
159,952
544
(81)
463
604
(40)
564
2,457,766
21,225,884(2,169,707)
19,056,176
105,457(4,558)(6,304)

66,613
14,330(2,290)12,04071,817(16,419)
55,397
77,433,848
945
97,260,780

99,152
14,326(3,008)
11,31876,121(21,723)
54,397
81,618,833
5,886
103,464,511

2,013
2,013

8,806
8,806

103,557
12
10,000113,569
97,376,363

94,32617
10,000104,343
103,577,662

18,075
18,075
105,828,211

12,05012,050112,235,819

Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Long-term loans due within one year
Accounts payable - otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term loans
Lease and guarantee deposits received
Lease and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Unitholders’ capital (net)
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

347,1039,600,000
288,400
50,743855
38,660449,764
676
10,776,204

217,790
6,800,000
9,200,000
295,160
56,973957
397,611
10,184
16,978,677

40,600,000
88,166
3,851,485
44,539,651
55,315,856

41,000,000
88,716
3,603,120
44,691,837
61,670,515

49,442,685(7,136)49,435,549

49,442,685(7,136)49,435,549

1,076,805

1,129,754

1,076,805
50,512,354
50,512,354
105,828,211

1,129,754
50,565,304
50,565,304
112,235,819

38

SANKEI REAL ESTATE Inc.

Statement of Income and Retained Earnings (Unabridged)
for the Fiscal Period Ended August 2023 (9th FP)(Unit: thousand yen)
8th FP

9th FP(as of Feb. 28, 2023)(as of Aug. 31, 2023)

2,452,313

2,343,152

439,634

243,748

Operating revenue
Rent business revenue
Other rent business revenue
Gain on sale of real estate, etc.

-

164,424

2,891,948

2,751,326

1,338,956

1,110,607

247,055

245,773

Asset custody fee

2,092

2,192

Administrative service fees

8,020

8,170

Remuneration for directors (and other officers)

3,600

3,600

Other operating expenses

48,32546,384

Total operating expenses

1,648,050

1,416,727

Operating income

1,243,897

1,334,598

Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee

Non-operating income
Interest income

41

40

Reversal of distributions payable

584

639

Insurance claim income

930-

Other non-operating income

285

9

Total non-operating income

1,842

689

Interest expenses

114,796

139,180

Borrowing related expenses

47,42757,511

Amortization of investment unit issuance expenses

6,024

6,024

Non-operating expenses

Other non-operating expenses

-

2,000

Total non-operating expenses

168,248

204,716

Ordinary income

1,077,491

1,130,571

Net income before income taxes

1,077,491

1,130,571

Income taxes - current

861

963

Income taxes - deferred

3

(4)

865

958

1,076,626

1,129,612

Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

178

141

1,076,805

1,129,754

39

SANKEI REAL ESTATE Inc.

Statement of Cash Flows for the Fiscal Period Ended August 2023 (9th FP)(Unit: thousand yen)

Cash flows from operating activities
Net income before income taxes
Depreciation
Amortization of investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Decrease due to the sale of property, plant and equipment in trust
Decrease (increase) in other assets
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Proceeds from lease and guarantee deposits received
Refund of lease and guarantee deposits received
Proceeds from lease and guarantee deposits received in trust
Refund of lease and guarantee deposits received in trust
OthersNet cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans
Proceeds from long-term loans
Repayments of long-term loans
Distributions paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

8th FP

9th FP(as of Feb. 28, 2023)(as of Aug. 31, 2023)

1,077,491
297,033
6,024(41)
114,796(1,775)
9,006
77,214(22,151)(133,178)
1,936(5,360)(399)
78
1,420,674
41(108,884)(932)
1,310,899

1,130,571
322,1126,024(40)
139,180
1,832(166,963)(16,070)(83,458)
8,101(38,660)(52,153)
9,507
9,230
447,918(82)
1,717,050
40(132,950)(861)
1,583,278(542)(130,867)
632(703)
74,547(351,923)(408,856)(7,125)(7,014,566)
5,231(2,344)
306,551(554,915)(8,000)(7,275,168)

5,900,000(5,900,000)(1,474,263)(1,474,263)(572,220)8,878,719
8,306,499

6,800,000
3,700,000(3,700,000)(1,077,059)
5,722,940
31,0508,306,499
8,337,549

40

SANKEI REAL ESTATE Inc.

Status of Lenders (as of September 29, 2023)
Category

LenderLoan amount(million yen)Interest rate

Borrowing date(upper row)
Maturity date(lower row)

Repayment
methodDescription

Category

LenderMizuho Bank

Short-term
Mizuho Bank
loans

6,400

6,400

Loan amount(million yen)

900

0.39545%

Mar. 30, 2023

Development Bank of Japan700(floating)Mar. 30, 2024

Mizuho Trust & Banking

300

Sumitomo Mitsui Trust Bank

300

856

SBI Shinsei Bank

300

Sumitomo Mitsui Banking

639

Resona Bank

200

Development Bank of Japan

548

Aozora Bank

500

Mizuho Trust & Banking

350

Sumitomo Mitsui Trust Bank

319

SBI Shinsei Bank

294

Resona Bank

294

Mizuho Bank

1,167

Sumitomo Mitsui Banking

832

Development Bank of Japan

713

Mizuho Trust & Banking

456

Sumitomo Mitsui Trust Bank

416

SBI Shinsei Bank

358

Resona Bank

358

Mizuho Bank

1,331

Sumitomo Mitsui Banking

929

Development Bank of Japan

796

Mizuho Trust & Banking

509

Sumitomo Mitsui Trust Bank

465

SBI Shinsei Bank

385

Long-term Resona Bank
loans
Mizuho Bank

4,300

4,800

0.49096%Mar. 12, 2019

Mizuho Bank

1,574

(fixed)Mar. 12, 2024

Sumitomo Mitsui Banking

1,084

Development Bank of Japan

929

Mizuho Trust & Banking

593

Sumitomo Mitsui Trust Bank

542

SBI Shinsei Bank439

0.32923%

Mar. 12, 2020

(fixed)Sep. 12, 2024

0.36978%Mar. 12, 2021

(fixed)Mar. 12, 2025

385
1,550

Lump-sum
repayment atmaturity

Unsecured/
Nonguaranteed

Resona Bank

439

Mizuho Bank

2,250

Sumitomo Mitsui Banking
Long-term
Mizuho Trust & Banking
loans
Sumitomo Mitsui Trust Bank

1,500

SBI Shinsei Bank

490

Resona Bank

490

Mizuho Bank

972

Sumitomo Mitsui Banking

716

Development Bank of Japan

614

Mizuho Trust & Banking

392

Sumitomo Mitsui Trust Bank

358

SBI Shinsei Bank

324

Resona Bank

324

Mizuho Bank

950

620

1,000

Development Bank of Japan

700

Mizuho Trust & Banking

600

Sumitomo Mitsui Trust Bank500

SBI Shinsei Bank, Limited

500

Resona Bank

400

Mizuho Trust & Banking

620

The Nishi-Nippon City Bank

500

Sumitomo Mitsui Trust Bank

550

Kansai Mirai Bank300

SBI Shinsei Bank

490

Chiba Bank

150

Resona Bank

Mizuho Bank

750

Sumitomo Mitsui Banking

700

Development Bank of Japan

700

Mizuho Trust & Banking

200

Sumitomo Mitsui Trust Bank500

SBI Shinsei Bank

500

Resona Bank

400

Aozora Bank

1,500

The Nishi-Nippon City Bank

500

Kansai Mirai Bank

300

Chiba Bank

150

4,300

5,600

5,900

550

Sumitomo Mitsui Banking

6,200

Borrowing date(upper row)
Maturity date(lower row)

Repayment
methodDescription

Lump-sum
repayment atmaturity

Unsecured/
Nonguaranteed

1,100

Sumitomo Mitsui Banking

Mizuho Bank

3,300

Interest rate

0.29655%

Sep. 2, 2021

Sumitomo Mitsui Banking

800(fixed)Sep. 2, 2025

Development Bank of Japan

2,000

3,700

5,900

0.38044%

Oct. 1, 2021

(fixed)Apr. 1, 2026

0.77500%

Mar. 14, 2022

(fixed)Mar. 14, 2028

0.79285%

Sep. 5, 2022

(fixed)Mar. 5, 2027

1.02763%

Mar. 13, 2023

(fixed)Sep. 13, 2027

0.45386%

Sep. 4, 2023

(floating)Apr. 1, 2026

490

Total

56,600* If the maturity date is not a business day, it will be the following business day, and if thatbusiness day is the following month, it will be the immediately preceding business day.
6,200

0.35542%

Sep. 2, 2021

(fixed)Sep. 2, 2026

41

SANKEI REAL ESTATE Inc.

Key Performance Indicators (KPIs) for the Fiscal Period Ended August 2023 (9th FP)
8th FP

9th FP

8th FP(as of Feb. 28, 2023) (as of Aug. 31, 2023)

9th FP(as of Feb. 28, 2023) (as of Aug. 31, 2023)

2,305 yen

2,418 yen

Distribution yield

5.3%

5.2%

3.5%

ROE

4.3%

4.5%

3.5%

3.3%

Net assets per unit

108,140 yen

108,253 yen(against book value)

3.2%

2.9%

NAV per unit

123,067 yen

118,704 yen(against appraisal value)

3.0%

2.7%

Investment unit price (at end of period)

86,400 yen

93,300 yen(NOI yield)

4.3%

3.7%

NAV multiple

0.7x

0.8x

(NOI yield after depreciation)

3.6%

3.1%

PBR

0.8x

0.9x

FFO

1,372 million yen 1,286 million yen

PER

18.8x

19.3x

AFFO

1,160 million yen 1,066 million yen

FFO multiple

14.7x

16.9x

(FFO)

78.4%

87.8%

(AFFO)

92.8%

105.9%

LTV ratio(against total assets)

47.4%

50.8%

Distribution per unit

(against total assets<considering unrealized
gain/loss>)

44.5%

48.7%

(against book value)

3.8%(against appraisal value)

NOI yield

NOI yield after depreciation

Implied cap rate

FFO per unit

2,938 yen

2,753 yen
Payout ratio

EPS
*1.
*2.

*3.

*4.

*5.
*6.

2,304 yen

2,418 yen

LTV (against total assets) = Interest-bearing liabilities / Total assets (book value)
LTV (against total assets <considering unrealized gain/loss>) = Interest-bearing liabilities / (Total assets (bookvalue) + unrealized gain/loss)
NOI yield (against book value) = (Operating income from real estate rent business + depreciation) / Book value ofreal estate for lease
NOI yield (against appraisal value) = (Operating income from real estate rent business + depreciation) / Appraisal
value of real estate for lease
NOI yield after depreciation (against book value) = Operating income from real estate rent business / Book valueof real estate for lease
NOI yield after depreciation (against appraisal value) = Operating income from real estate rent business /Appraisal value of real estate for lease
Implied cap rate (NOI yield) = NOI (Annualized; current FP result x 2) / (Total fair value +Interest-bearing liabilities– Cash and deposits + Leasehold deposits received)
Implied cap rate (NOI yield after depreciation) = NOI after depreciation (Annualized; current FP result x 2) / (Total
fair value + Interest-bearing liabilities – Cash and deposits + Leasehold deposits received)
FFO = Net profit + Depreciation – Gain/loss on sales of real estate properties (including loss on retirement of noncurrent assets)
AFFO = FFO – Capital expenditure

*7.
*8.
*9.
*10.
*11.
*12.
*13.
*14.
*15.
*16.
*17.
*18.
*19.

FFO per unit = FFO / Total number of investment units issued and outstanding at end of period
EPS = Net profit / Total number of investment units issued and outstanding at end of period
Distribution per unit = Total distribution / Total number of investment units issued and outstanding at end of
periodDistribution yield = Distribution per unit (Annualized; current FP result x 2) / Investment unit price (at end of
period)ROE (Return on equity) = Net profit (Annualized; most recent FP result x 2) / Net assets
NAV per unit = (Net assets + Unrealized gain/loss) / Total number of investment units issued and outstanding at
end of period
NAV multiple = Investment unit price (at end of period) / NAV per unit
PBR (Price Book-value Ratio) = Investment unit price (at end of period) / Net assets per unit
PER (Price Earnings Ratio) = Investment unit price (at end of period) / EPS (Annualized; most recent FP result x 2)
FFO multiple = Investment unit price / FFO per unit (Annualized; most recent FP result x 2)
Payout ratio (FFO) = Total distribution / FFO
Payout ratio (AFFO) = Total distribution / AFFO
Figures are rounded down to the indicated digits (Percentages and multiples are rounded to one decimal place.)

42

SANKEI REAL ESTATE Inc.

Statement of Income from Rent Business by Property for the Fiscal Period Ended August 2023 (9th FP)(Unit: thousand yen)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

A-8

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Property nameTokyo
Sankei Building

BREEZÉ TOWER

S-GATE NIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

ToyoPark Building

Shinagawa Seaside
TS Tower*

Rent business revenue

59,193525,246

157,142

69,258202,087

177,468

91,754

Rental revenue

51,061

413,320

147,671

65,353

184,116

145,339

73,243

Common area
maintenance revenue

2,021

78,959

-

-

3,975

13,790

5,937

Utilities reimbursement

4,228

23,426

6,441

3,821

11,413

11,976

9,545

833

7,921

2,854

24

1,662

4,782

2,790

Other rental revenue

1,047

1,619

174

59

920

1,579

238

Expenses related to rent
business

35,046

241,693

46,33923,39596,33067,52538,473

Outsourcing expenses

6,010

71,912

8,553

5,778

16,51916,7798,710

Utilities expenses

4,865

48,047

7,449

4,039

13,276

15,511

11,796

Property taxes

13,14338,553

11,337

5,018

57,018

11,131

8,055

683

1,135

-

-

-

-

-

Repair expenses

3,119

14,021

-

209

2,580

5,190

398

Insurance premium

106

860

371

168

353

532

253

-

247

250

250

250

250

350

3,617

63,021

18,068

7,623

6,114

17,631

8,714

3,500

3,894

308

307

218

498

194

24,147

283,553

110,80345,862

105,756

109,943

53,281

31,234

27,764

346,575

128,871

53,486

111,871

127,574

61,996

92,790Parking revenue

Land rent

Trust fee
Depreciation
Other expenses related
to rent business
Operating income (loss)
from rent business
NOI

(Not
disclosed)** The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant,relevant party, etc. or information from which confidential information can be derived.

61,55643

SANKEI REAL ESTATE Inc.

Statement of Income from Rent Business by Property for the Fiscal Period Ended August 2023 (9th FP)(Unit: thousand yen)
Total

Property number

A-9

A-10

A-11

A-12

B-1

B-2

B-3

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Sub assets

Property name

Omori
Park Building

S-GATE AKASAKA*

Miyazakidai Garden
OfficeHitachi Kyusyu
Building*

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

SANKEILOGI Settsu

Rent business revenue

137,843

92,118206,955

118,800

99,4492,586,901

Rental revenue

107,099

73,087

206,955

118,800

98,7762,224,844

Common area
maintenance revenue

10,037

3,587

-

-

-

118,308

Utilities reimbursement

15,356

12,580---113,684

Parking revenue

4,680

1,542

-

-

-

33,632--673

96,431

55,73943,493

21,5481,110,607

Other rental revenue

670

Expenses related to rent
business

70,325

Outsourcing expenses

13,789

6,377

1,200

1,200

904

221,524

Utilities expenses

23,982

15,258---

189,454

Property taxes

17,087

6,882

26,906

15,8880313,078

-

-

-

-

-

1,818

Repair expenses

2,308

3,434

-

-

-

37,704

Insurance premium

482

232

577

534

325

7,097

Trust fee

350

350

250

250

293

4,090

26,77025,57220,001

320,905

36

48

23

14,933

Land rent

Depreciation
Other expenses related
to rent business
Operating income (loss)
from rent business
NOI

11,793(Not
disclosed)*

12,968530

1,321
41,339

8,218(Not
disclosed)

29,232583

67,518103,789

50,779185,200

151,21675,306

77,901

1,476,293

79,311

116,757

58,997

214,433

177,986

100,879

97,902

1,797,199* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant,relevant party, etc. or information from which confidential information can be derived.

44

SANKEI REAL ESTATE Inc.

Overview of Appraisal Value (as of August 31, 2023)(Unit: million yen)
Property
number

Property nameAcquisition
price

End of the 9th FP
Book value (a)End of the 8th FP

End of the 9th FP(February 28, 2023) (b)(August 31, 2023) (c)Appraisal value

CR

Appraisal value

2,509

2,618

2,620

2.3%

2,570

2.3%

12,64812,556(18,000)(3.6%)

17,380

3.5%

*2

*2

6,698

6,635

7,750

3.2%

7,750

3.2%

A-4

S-GATE AKIHABARA

2,055

2,021

2,710

3.3%

2,690

3.3%

A-5

Hibiya Sankei Building

5,829

6,060

6,620

2.8%

6,630

A-6

Hatchobori Sankei Building

4,959

4,989

5,490

4.1%

A-7

Toyo Park Building

3,782

3,871

3,920

A-8

Shinagawa Seaside TS Tower(50% quasi co-ownership interest in sectional
ownership of the building, etc.)

20,94021,191

A-9

Omori Park Building

5,400

A-10

S-GATE AKASAKA

A-11
A-12

A-2

A-3

CR

-50

-

Unrealized
gain/loss(c)－(a)

0.0pt

-49

(-0.1pt)

4,823

*2

0.0pt

1,114

-20

0.0pt

668

2.8%

+10

0.0pt

569

5,470

4.1%

-20

0.0pt

480

3.7%

3,900

3.7%

-20

0.0pt

28

19,4503.3%

17,3503.4%-2,100+0.1pt-3,841

5,445

5,490

3.7%

5,270

3.7%

-220

0.0pt

-176

7,000

7,040

(5,992)(3.1%)

7,400

3.1%

(0.0pt)359

Miyazakidai Garden Office

2,800

2,835

2,730

4.5%

2,710

4.5%

0.0pt

-125

Hitachi Kyusyu Building

10,00010,167

10,300

4.3%

10,3004.2%-0.1pt132

84,62385,43391,072

Office buildings subtotal (total of 12 properties)

*2

*2

-

89,420

-

-

-

*2

-20
-

-

3,986

B-1

Hotel Intergate Tokyo Kyobashi

8,961

8,871

9,040

3.8%

9,190

3.7%

+150

-0.1pt318

B-2

Hotel Intergate Hiroshima

3,990

3,847

4,120

4.6%

4,180

4.5%

+60

-0.1pt332

B-3

SANKEILOGI Settsu

5,242

5,307

(5,440)(3.8%)

5,550

3.7%

(+110)(-0.1pt)

242

*3

*3

*3

*3

Sub assets subtotal (total of 3 properties)

18,19318,025

Portfolio total (total of 15 properties)

102,816

103,458*3

Appraisal value

Tokyo Sankei Building(2% co-ownership interest)
BREEZÉ TOWER(43.45% quasi co-ownership interest in sectional
ownership of the office portion of the building,etc.)
S-GATE NIHONBASHI-HONCHO(51% co-ownership interest)

A-1

*1
*2

CR

Change from appraisal in theprevious fiscal period(c)－(b)18,600--18,920

-

-

-

894

-

108,340

-

-

-

4,881

CR is a cap rate based on direct capitalization method (NCF basis).
The figures in parentheses are the appraisal values prior to the partial sale and additional acquisition of quasi co-ownership interest (45% quasi co-ownership interest shown for A-2, 80%
quasi co-ownership interest for sectional ownership interest, of A-8).
The figures in parentheses show the appraisal values published at the time of acquisition as reference values, and “Change from appraisal in the previous fiscal period” is the change fromthe appraisal value published at the time of acquisition.

45

SANKEI REAL ESTATE Inc.

Change in NAV per Unit (after Deduction of Distribution)(Unit: yen)

123,491

121,641

123,268

122,507122,093
120,762

120,000

116,286

114,157
21,078110,000

108,184

17,433
19,227

20,114

Unrealized
gain

14,927
10,45011,744
Capitalincreasethroughpublicoffering

11,670100,000

16,257

Capitalincreasethroughpublicoffering

90,000102,413

102,413

102,413102,393

End of February
2020(2nd FP)End of August
2020(3rd FP)End of February
2021(4th FP)End of August2021(5th FP)105,835

105,836

105,836

105,836

End of February2022(6th FP)End of August2022(7th FP)End of February2023(8th FP)End of August2023(9th FP)

96,51580,000～～Net assets

End of August
2019(1st FP)46

SANKEI REAL ESTATE Inc.

Portfolio List (1) (as of August 31, 2023)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

A-8

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Property nameTokyo
Sankei Building

BREEZÉ TOWER

Office buildings
S-GATENIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

ToyoPark Building

Shinagawa Seaside
TS Tower(2% co-ownershipinterest)(43.45% quasi co-ownershipinterest in sectional
ownership of the officeportion of the building, etc.)(51% co-ownershipinterest)

Chiyoda-ku, Tokyo

Kita-ku, Osaka-shi

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Koto-ku, Tokyo

Shinagawa-ku, Tokyo

Acquisition date
* Including partial saleMar. 12, 2019(1) Mar. 12, 2019(2) Sep. 3, 2019(3) Aug. 31, 2023*

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019(1) Sep. 3, 2019(2) Sep. 2, 2021

Acquisition price

2,509 million yen

12,648 million yen

6,698 million yen

2,055 million yen

5,829 million yen

4,959 million yen

3,782 million yen

20,940 million yen

Appraisal value

2,570 million yen

17,380 million yen

7,750 million yen

2,690 million yen

6,630 million yen

5,470 million yen

3,900 million yen

17,350 million yen

Appraisal NOI yield(Appraisal NOI/Acquisition
price)

2.5%

5.3%

3.8%

4.4%

3.5%

5.1%

4.0%

3.1%

Construction completion

Sep. 2000

Jul. 2008

Oct. 2018

Sep. 2017

Jun. 1992

Sep. 1965

Jun. 1991

Jul. 2003

Occupancy rate

99.8%

96.7%

100.0%

100.0%

100.0%

100.0%

75.1%

9.6%

PML value

2.3%

2.8%

2.0%

2.2%

3.1%

0.3%

9.0%

3.2%

Location(50% quasi co-ownershipinterest in sectional
ownership of the building,
etc.)

47

SANKEI REAL ESTATE Inc.

Portfolio List (2) (as of August 31, 2023)
Property number

A-9

A-10

A-11

A-12

B-1

B-2

B-3

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Sub assets

Property name

Omori
Park Building

S-GATEAKASAKA

Miyazakidai
Garden OfficeHitachi Kyusyu
Building

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

SANKEILOGI Settsu

Location

Ota-ku, Tokyo

Minato-ku, Tokyo

Miyamae-ku,
Kawasaki-shi

Sawara-ku,
Fukuoka-shi

Chuo-ku, Tokyo

Naka-ku,
Hiroshima-shi

Settsu-shi, Osaka

Acquisition date

Sep. 3, 2019(1) Oct. 1, 2020
(2) Sep. 2, 2021
(3) Mar. 31, 2023

Sep. 2, 2021

Sep. 2, 2021

Mar. 12, 2019

Sep. 3, 2019

Mar. 31, 2023

Acquisition price5,400 million yen

7,000 million yen

2,800 million yen

10,000 million yen

8,961 million yen

3,990 million yen

5,242 million yen

Appraisal value

5,270 million yen

7,400 million yen

2,710 million yen

10,300 million yen

9,190 million yen

4,180 million yen

5,550 million yen

Appraisal NOI yield(Appraisal NOI/Acquisition
price)

3.8%

3.3%

4.5%

4.7%

3.9%

4.9%

4.0%

Construction completion

May 1993

Jul. 2015

Feb. 1993

Feb. 1996

Jan. 2018

Oct. 2018

Oct. 2022

Occupancy rate

79.2%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%PML value

5.6%

4.6%

9.5%

2.5%

1.8%

2.1%

6.9%

PML value (average)

1.8%

48

SANKEI REAL ESTATE Inc.

Portfolio Matrix (1) (as of August 31, 2023)<Cap. Rate (Appraisal NOI Yield) x Area>
Area

Area

Tokyo 23 wards

Central 3 wards of Tokyo(Chiyoda, Chuo, and Minato wards) (Other than the central 3 wards of Tokyo)
Appraisal
NOI
CAP
Less than
3.0%
Less than
3.5%

Property name
Building age, walking
time from station

Property nameAcquisition price

Building age, walking
time from station

Other ordinance-designated cities(Excluding Tokyo)

Greater Nagoya

Core Cities, Major Regional Cities

Property name

Property name

Building age, walking
Acquisition pricetime from station

Building age, walking
time from station

Total acquisition
price(Overall ratio)

Property nameAcquisition price

Building age, walking
time from station

Acquisition price
2,509

22 years old,
1-minute walk

(2.4%)

2,509

S-GATE AKASAKA
8 years old,
1-minute walk
31 years old,
1-minute walkCap. Rate

Greater Osaka

Tokyo Sankei Building

7,000

5,829

27,940Shinagawa Seaside TS Tower
20 years old,
1-minute walkHibiya Sankei Building

Less than
4.0%

Acquisition priceGreater Tokyo

20,940(27.2%)

Omori Park Building
30 years old,
3-minute walk

5,400

S-GATE NIHONBASHIHONCHO

26,8894 years old,
4-minute walk

(26.2%)

6,698

Hotel Intergate Tokyo
Kyobashi
5 years old,
1-minute walkLess than
4.5%

8,961

S-GATE AKIHABARA
5 years old,
5-minute walk2,055

Toyo Park Building
32 years old,
9-minute walkLess than
5.0%

11,079SANKEILOGI SettsuNew,
6-minute walk

3,782

(10.8%)

5,242

Miyazakidai Garden OfficeHitachi Kyusyu building

30 years old,
3-minute walk27 years old,
17-minute walk

2,800

Hotel Intergate Hiroshima
4 years old,
3-minute walk

5.0%
or more10,000Hatchobori Sankei Building
58 years old,
3-minute walk

4,959

3,990
17,608BREEZÉ TOWER
15 years old,
3-minute walk

16,790(16.3%)(17.1%)

12,648

Total acquisition
price38,01330,1222,800

17,89013,990102,816(Overall ratio)(37.0%)(29.3%)(2.7%)(17.4%)(13.6%)(100.0%)

Typical Floorplate * Office Buildings Only
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than
100 tsubos

Assets other than office buildings

49

SANKEI REAL ESTATE Inc.

Portfolio Matrix (2) (as of August 31, 2023)<Typical Floorplate x Area>
Area

Area
Tokyo 23 wards

Central 3 wards of Tokyo

Typicalfloorplate(tsubo)400 tsubos
or more(Chiyoda, Chuo, and Minato wards) (Other than the central 3 wards of Tokyo)
Property name
Property name
Building age, walking
Acquisition pricetime from station

Building age, walking
time from station

Tokyo Sankei Building

Shinagawa Seaside TS Tower

22 years old,
1-minute walk

20 years old,
1 -minute walk

2,509

Acquisition priceGreater Tokyo

Greater Osaka

Other ordinance-designated cities(Excluding Tokyo)
Property nameGreater Nagoya
Property nameCore Cities, Major Regional Cities
Property name

Building age, walking
Acquisition pricetime from station

Building age, walking
Acquisition pricetime from station

Building age, walking
Acquisition pricetime from station

BREEZÉ TOWER
15 years old,
3-minute walk

20,940

Typical floorplate(tsubo)41,34012,648(40.2%)

SANKEILOGI SettsuNew,
6-minute walkLess than
400 tsubos
300 tsubos
or moreLess than
300 tsubos
200 tsubos
or moreHatchobori Sankei Building
58 years old,
3-minute walk

4,959

Omori Park Building

Miyazakidai Garden Office

30 years old,
3-minute walk

30 years old,
3-minute walk

5,400

Total acquisition
price(Overall ratio)

5,242

Hitachi Kyusyu building
27 years old,
17-minute walk

2,800

10,00018,200(17.7%)

Toyo Park Building

Hotel Intergate Hiroshima

12,73232 years old,
9-minute walk4 years old,
3-minute walk

(12.4%)

3,782

3,990

S-GATE NIHONBASHIHONCHO
4 years old,
4-minute walk

6,698

Hibiya Sankei Building
Less than
200 tsubos
100 tsubos
or more31 years old,
1-minute walk

28,4895,829(27.7%)S-GATE AKASAKA
8 years old,
1-minute walk

7,000

Hotel Intergate Tokyo
Kyobashi
5 years old,
1-minute walkLess than
100 tsubos

8,961

S-GATE AKIHABARA

2,055

5 years old,
5-minute walk

(2.0%)

2,055

Total acquisition
price38,01330,1222,800

17,89013,990102,816(Overall ratio)(37.0%)(29.3%)(2.7%)(17.4%)(13.6%)(100.0%)

Typical Floorplate * Office Buildings Only
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Assets other than office buildings (Construction area is used as reference value)Less than
100 tsubos

50

SANKEI REAL ESTATE Inc.

Portfolio Matrix (3) (as of August 31, 2023)
Strong sponsor
support■ Cap Rate (Appraisal NOI Yield) x Area × Acquisition Price
Low

Diversified investment bymaking maximum use ofstrong sourcing ability

Core investment centeredon developed properties

Central 3 wards of Tokyo

0 (Chiyoda, Chuo, and Minato
1 wards)

Area

Tokyo 23 wards(other than central
3 wards of Tokyo)
2

2.0%

2.5%

Cap. Rate

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

Tokyo Sankei Building
Typical floorplate
536 tsubos
22 years old
S-GATE AKASAKA
1-minute walk
Typical floorplate
158 tsubos
8 years old
1-minute walkHibiya Sankei Building
Typical floorplate
105 tsubos
31 years old
1-minute walk

Makes portfolio’s
profitability and stability
compatible

Shinagawa Seaside TS Tower
Typical floorplate 446 tsubos
20 years old
1-minute walkGreaterTokyo(other
3 than Tokyo
23 wards)

Greater Osaka
4
Greater Nagoya

Other ordinancedesignated cities
Core cities, major
regional cities 5
Major Regional Cities

Office buildings
Sub assets* Red indicates acquired assets
The size of bubble represents
the acquisition priceToyo Park Building
Typical floorplate
219 tsubos
32 years old
S-GATE NIHONBASHI9-minute walk
Omori Park Building
HONCHO
Typical floorplate
Hotel Intergate
Typical floorplateTokyo Kyobashi
186 tsubos
342 tsubos
5 years old
4 years old
30 years old
1-minute walk
4-minute walk
3-minute walk
S-GATE AKIHABARA
Miyazakidai
Typical floorplate 74 tsubos
Garden Office
5 years old 5-minute walk
Typical floorplate 350 tsubos
30 years old
3-minute walk

Actual NOI yield*

3.5%■ Investment Ratio byGeographic Area

Hiroshima City 3.9%
FukuokaCity

9.7%

Greater
Osaka

Greater
Tokyo
17.4%
69.0%
SANKEILOGI SettsuNew
6-minute walk

Kawasaki City 2.7%

Tokyo 23 wards
66.3%

Hitachi Kyusyu Building■ Investment Ratio by
Typical floorplate 322 tsubos
Asset Type27 years old
17-minute walk
BREEZÉ TOWER
Typical floorplate
406 tsubos
Sub assets
15 years old
17.7%
3-minute walk

Hatchobori Sankei Building
Typical floorplate 201 tsubos
58 years old
3-minute walkHotel Intergate
Hiroshima
4 years old
3-minute walk

Office buildings
82.3%

High 6.0%* “Actual NOI yield” refers to the actual NOI yield calculated assuming the level of normal operations, after adjusting temporary factors
such as fixed asset taxes that were not expensed at the time of acquisition and one-off termination penalties.

51

SANKEI REAL ESTATE Inc.

Portfolio Status (as of August 31, 2023)
SANKEI REAL ESTATE’s high-quality portfolio is supported by strong sponsor support

Sponsor support rate 100%
Close
Percentage by Walking Time to the Nearest Station(excluding logistics facilities)
More than
5 minutes
14.1%
More than
3 minutes,
but within
5 minutes
9.0%
Average

New
Percentage by Building Age

More than
30 years
22.1%

3.9
minutes

19.1
years
More than
20 years, but
within 30 years

More than 1 minute,but within 3 minutes
30.5%

Within 10 years

46%

Within 3 minutes

77%

Within 5 minutes

86%
0%

20%

40%

60%

80%

100%

Average317.3
tsubos21.5%

Large-scale buildings*

78%
40%

60%

42.7%

300 tsubos or more,
but less than 400 tsubos

45%

Within 30 years

400
tsubosor more

10.3%

33%

20%

23.1%

12.3%

Within 20 years

0%Less than
100 tsubos
100 tsubos
or more, 2.4%
but less than
200 tsubos

200 tsubos or
more,
but less than
300 tsubos

More than
10 years,
but within
20 years

32.5%

Within 1 minutes

Percentage by Typical Floorplate (Office Buildings)

Within
10 years
33.0%

Average

Within
1 minute
46.4%

Large

80% 100%

74%

Large buildings

98%
0%

20%

40%

60%

80% 100%* Calculated based on the definition of “Large-scale buildings: 200 tsubos or more” and “Large buildings: 100 tsubos or more, but less than 200 tsubos” made by Sanko Estate Co., Ltd.

52SANKEI REAL ESTATE Inc.

Status of Lease Agreements (as of August 31, 2023; based on leased area after considering ownership interest)
Percentage by Lease Period

Percentage by Lease Period

Percentage by Contract Form

(Excluding hotels and logistics facilities)

10 years or more

Fixed-term building
lease agreement

10 years or more

4.5%

Less than 3 years

Less than 3 years

20.8%

32.7%
38.9%

39.9%

Average

Average

5.6 years

60.1%

5 years or
more, but lessthan 10 years

55.2%

2.4 years
19.5%

14.6%

13.8%

Ordinary building
lease agreement

5 years or more, butless than 10 years

3 years or more, butless than 5 years

Percentage by Business Type

Percentage by Business Type
Wholesale & retail 3.6％

(Manufacturing)

Others 3.6％
Precision devices 2.2%

Construction & real estateIT

Machinery 2.8%
Materials 2.9%

4.6%
5.7%

Food
 NH Foods, etc.

38.5%
Service Toyo Sangyo
 Yokogawa Solution Service
 NEC Facilities, etc.

3 years or more, butless than 5 years

Others 1.5%

11.1%

11.9%
Pharmaceuticals
 Bayer Yakuhin, etc. 11.6%

67.8%

14.9%
Hotel
 GRANVISTA Hotels & Resorts(100% subsidiary of the Sponsor)

Manufacturing
17.2%

Transportation & communications
 Keishin and others

General electrical appliance manufacturers
and electronics manufacturers
 Hitachi, etc.

53

SANKEI REAL ESTATE Inc.

Top End Tenants by Leased Area (as of August 31, 2023)

Business type

Total leased
area
(m²)

% of
portfolio’s
total leased
area

Manufacturing(general electricalappliances)

26,513.3

26.50%

Hitachi Kyusyu Building

Hotels15,166.7

15.16%

Hotel Intergate Tokyo Kyobashi
Hotel Intergate Hiroshima

Keishin K.K.

Transportation

14,489.6

14.48%

SANKEILOGI Settsu

Bayer Yakuhin, Ltd.

Manufacturing(pharmaceutical)

Not
disclosed

Not
disclosed

BREEZÉ TOWER

Hakuhodo DY Holdings Inc.

Services(advertising)

3,147.1

3.15%

S-GATE AKASAKA

NH Foods Ltd.

Manufacturing(food)

Not
disclosed

Not
disclosed

BREEZÉ TOWER

Konoike Construction Co., Ltd.

Construction

2,542.7

2.54%

S-GATE NIHONBASHI-HONCHO

Toyo Sangyo Co., Ltd.

Services(equipment
maintenance)

1,509.7

1.51%

Omori Park Building

IT

1,476.0

1.48%

Shinagawa Seaside TS Tower

Services(equipment
maintenance)Not
disclosed

Not
disclosed

BREEZÉ TOWER

Name of end tenant

Hitachi, Ltd.
GRANVISTA Hotels & Resorts Co., Ltd.

HBA Corporation
Yokogawa Solution Service Corporation

Property name

*1 The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party,
etc. or information from which confidential information can be derived.
*2 “Total leased area” is rounded to one decimal place.

54

SANKEI REAL ESTATE Inc.

Status of Unitholders (as of August 31, 2023)
 Breakdown of Investment Units by Unitholder Type100%

Financial institutions
Other Japanese corporations
Individuals/Other
13.22%

90%
80%

Securities companies
Non-Japanese corporations, etc.

 Major Unitholders
Number ofunits owned(units)Share of units
owned
(%)

Custody Bank of Japan, Ltd. (Trust Account)

107,191

22.94%The Master Trust Bank of Japan, Ltd. (Trust Account)

89,24419.10%The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

20,172

4.31%

The Sankei Building Co., Ltd.

17,4793.74%

JP MORGAN CHASE BANK 385771

7,164

1.53%

The Bank of Yokohama, Ltd.

5,691

1.21%

The Hyakujushi Bank, Ltd.

3,500

0.74%

JAPAN SECURITIES FINANCE CO., LTD.

3,273

0.70%

UEDA YAGI TANSHI Co., Ltd.

3,266

0.69%

BNP Paribas Securities (Japan) Limited

3,171

0.67%

260,151

55.69%Name of unitholder

16.07%
24.48%

25.63%

25.00%

11.10%

10.65%

9.62%

6.87%

7.12%

15.62%
18.23%

70%

5.96%
2.57%

5.94%
2.00%

60%

4.38%

7.15%
2.63%

5.39%

50%
40%
62.61%

30%

57.74%

53.15%

55.59%

51.20%

20%
10%0%

End of 5th FP

End of 6th FP

End of 7th FP

End of 8th FP

End of 9th FP

 Number of Unitholders by Unitholder TypeEnd of
5th FP

End of
6th FP

End of
7th FP

End of
8th FP

End of
9th FP

Financial institutions

43

50

50

47

45

Securities companies

22

23

23

22

21

124

178

240

248

238

75

143

160

171

168

Individuals/Other

7,064

10,117

13,872

13,981

13,894

Total

7,328

10,511

14,345

14,46914,366

Other Japanese
corporations
Non-Japanese
corporations, etc.

Total
* Each share above is rounded down to two decimal place.

55

SANKEI REAL ESTATE Inc.

Profile of the Asset Management Company
Trade name

Sankei Building Asset Management Co., Ltd.

Established

April 13, 2018

CapitalShareholder composition
Main line of businessDirectors and auditors

5 directors
1 auditor

100 million yen

Financial instruments
business registration

Director-General of the Kanto Local Finance Bureau Registration(FIBO) No. 3094

The Sankei Building Co., Ltd. 100%

Real estate brokerage
licenseGovernor of Tokyo License (2) No. 102209

Investment management business, investment advisory andagency business, type II financial instruments business

Discretionary transaction
agency, etc. approval

Minister of Land, Infrastructure, Transport and Tourism ApprovalNo. 125

General Meeting of Shareholders
AuditorBoard of Directors
Investment Committee

Compliance Committee
President and CEO

Internal Audit OfficeCompliance OfficeSustainability Promotion Office

Investment Management Department
SANKEI REAL ESTATE Inc.
・Investment policy planning・Acquisition and sale of assets undermanagement
・Operation and management ofassets under management

Finance & IR Department

・Corporate planning, accounting
and general affairs
・Financials and IR

Fund Management Department
Private equity real estate funds, etc.
・Investment policy planning・Acquisition and sale of assets
under management
・Operation and management ofassets under management

56

SANKEI REAL ESTATE Inc.

Notes
Unless otherwise specified, the figures in this document are rounded down to the nearest unit and percentages are rounded to one decimal place. Therefore, the value, such as sum total, may not match the value obtained thereby.
Furthermore, the figures shown correspond to 2% co-ownership interest in Tokyo Sankei Building, 43.45% quasi co-ownership interest in sectional ownership of the building, etc. of the office portion of BREEZÉ TOWER, 51% co-ownershipinterest in S-GATE NIHONBASHI-HONCHO and 50% quasi co-ownership interest in sectional ownership of the building, etc. of Shinagawa Seaside TS Tower.
Page 3
１．Sankei Building Asset Management has concluded a sponsor support agreement with the Sponsor (Sankei Building) for receiving support providing sale information on properties and various other types of support.
Page 20
1. For the properties shown on the “Sponsor’s Main Development Results and Plans” page are those developed or scheduled to be developed by Sankei Building, special purpose companies or specified purpose companies in which
Sankei Building invests through silent partnership, preferred equity investment or other means, and affiliates of Sankei Building.
2. The development plans shown on this page are of SANKEI REAL ESTATE and SANKEI REAL ESTATE neither guarantees nor promises their execution.
Page 25■ (Top left graph) Change in Occupancy Rate
1. “Occupancy rate” indicates the percentage of the total leased area(*2) against the total leasable area(*1) of each of the acquired assets as of each base date, rounded to one decimal place.
(*1) “Total leasable area” is the total area believed to be leasable (not including area for storage facilities, billboards, parking areas, etc. that are not the main use) based on lease agreements or building drawings, etc. pertaining toeach of the acquired assets as of each date shown.
(*2) “Total leased area” is the total leased area (not including area for storage facilities, billboards, parking areas, etc. that are not main use) shown in lease agreements for the building pertaining to each of the acquired assets as ofeach date shown (excluding, however, lease agreements for which the lease period has not commenced). For the portion covered by a pass-through master lease, this is the total of the area for which a lease agreement has
actually been concluded with an end tenant for said portion, and the lease period has commenced.
■ (Top right graph) Change in Rent Gap for Office Buildings
1. “Rent Gap” refers to the figure arrived at when the amount of difference between the average rent for SANKEI REAL ESTATE’s office building portfolio(*1) and the market rent(*2) is divided by the market rent. SANKEI REAL ESTATE
believes there is room for negotiation with tenants to increase rent when revising rent if the figure is negative. This applies to the assets acquired by SANKEI REAL ESTATE as of the end of each fiscal period that are categorized as“Office Buildings.”(*1) “Average rent of the office building portfolio” is calculated using the weighted average, based on leased area, of the total amount of monthly rent specified in lease agreements concluded as of the end of each period, for theoffice building portfolio* (including CAM). Furthermore, it does not take into consideration free rent and rent holidays as of the same day and is based on the rent as of the end of each period, if there is an agreement to change
rent in the future. Furthermore, if agreements with tenants include variable rent, calculation is made without taking into consideration variable rent. (Consumption tax, etc. is not included.)(*2) “Market rent” is calculated using the weighted average, based on leased area, of the total median value of assumed new contract rent (typical floorplate) (including CAM) as of September 2023 for office buildings subject to rent
gap calculation within the acquired assets of SANKEI REAL ESTATE shown in the market report prepared by CBRE.
Market rent is assessed by CBRE using its own methodology assuming the conclusion of new contracts with new tenants as of March 2023 based on information collected by CBRE and the objectivity of the assessment, and thevalidity and accuracy of the assessment content are not guaranteed. In particular, actual new contract rent fluctuates due to factors such as whether it is for a new tenant or rent revision with an existing tenant, the timing of therent revision, the timing of moving in, the contract area and the region, and for this reason the rent in the CBRE-assessed rent may not be realized. Furthermore, the amount and level of actual new contract rent for the officebuilding portfolio are not guaranteed, and there are no assurances or promises that the rent increases equivalent to the “rent gap” will be made.
■ (Bottom figure) Change in Portfolio’s Actual NOI Yield and Office Buildings Average Rent Unit Price
１. “Actual NOI yield” refers to the actual NOI yield of all assets held at each point in time calculated using the following formula for assets after acquisition. The same applies below.
Actual NOI yield = Actual NOI (annualized)(*) ÷ acquisition price(*) Actual NOI states the level of normal operation(*). For example, as some fixed asset taxes on acquired assets have not been expensed in the fiscal period, these are the figures after adjustment assuming these are expensed.
For the fiscal period in which there was other temporarily occurring revenue (fiscal period ended August 2022), it is the figure calculated by subtracting this other revenue.
(*) “During normal operation” (also referred to as “the level of normal operation”) refers to the level at the time of stable operations rather than the temporary level immediately after commencement of operations by SANKEIREAL ESTATE. The same applies below.
２．Office Buildings Average Rent Unit Price is calculated using “Rental and CAM revenue upon the most recent settlement / 6 months / Leasable area x Occupancy rate of office building.”
Page 26■ (Top graph) Rent Revision Performance of Office Buildings (Based on Rental Area)
１. Of the assets acquired by SANKEI REAL ESTATE as of the end of each fiscal period, applies to properties classified under “Office Buildings” (12 properties in the fiscal period ended August 2023: Tokyo Sankei Building, BREEZÉ TOWER,
S-GATE NIHONBASHI-HONCHO, S-GATE AKIHABARA, Hibiya Sankei Building, Hatchobori Sankei Building, Toyo Park Building, Shinagawa Seaside TS Tower, Omori Park Building, S-GATE AKASAKA, Miyazakidai Garden Office, and Hitachi
Kyusyu Building). For example, for the fiscal period ended August 2023, in the 12 applicable properties, those with rent revision under lease agreements occurring in the period from March 1, 2023, until August 31, 2023 (limited tothose for which a lease agreement was concluded or renewed during the relevant period), applied to 30 tenants with a total of 10,855 tsubos in area (rounded to the nearest unit). Assuming the revised area is 100%, on a leased
area basis, monthly rent was increased in 4.7%, renewed at the same level (maintained) in 95.2%, and reduced in 0.0%. Changes in floor space were treated as rent revision performance, and if there was no change in the current
rent per unit, it is regarded as being maintained.
２. “Rate of increase” refers to the figure calculated by dividing the difference between the total monthly rent after renewal and the total monthly rent before renewal by the total monthly rent before renewal for lease agreements
renewed during each period (for example, from March 1, 2023, to the end of August 2023 for the period ended August 2023), with increased rent (calculated for renewal with rent revision/renewal of agreements with existing
tenants, limited to lease agreements concluded or renewed during the relevant period).

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Notes
Page 28■ (Top graph) Scheduled Renewal with Rent Revision/Renewal and Progress (Targeting Office Buildings)
1. Applies to lease agreements concluded as of the end of the fiscal period ended August 2023 (9th FP), stating the area subject to renewal with rent revision/renewal in the fiscal period ending February 2024 (10th FP) and the fiscal
period ending August 2024 (11th FP).
2. The leased area of the office buildings subject to “contract revision/renewal planned area” is the figure corresponding to the ownership interest acquired by SANKEI REAL ESTATE in each property.
3. “Ratio to total leased area” is the value calculated by dividing the total contract revision/renewal (planned) area for each contract revision/ renewal period by the total leased area for each period.
4. “Progress rate” is the value calculated by dividing the total leased area for lease contracts that have been concluded as of August 31, 2023, and whose revision/renewal has been completed by the contract revision/renewal(planned) area for each contract revision/renewal period.
Page 31■ (Top left figure) Financing Highlights
1. “Balance of interest-bearing liabilities” shows the figure as the date of disclosure.
2. “Ratio of long-term debt” is the ratio of the balance of the long-term interest-bearing debt (not including the current portion) included in the balance of interest-bearing liabilities as the date of disclosure.
3. “Average financing interest rate” is calculated using the weighted average, based the balance of interest-bearing debt, of the anticipated applicable interest rate of each interest-bearing liability as the date of disclosure. Calculations
are on an interest payable basis and do not include arrangement fee and other borrowing-related expenses.
4. “LTV” is the balance of interest-bearing liabilities divided by the amount of total assets and multiplied by 100, rounded to one decimal place. The figures at the end of the 10th FP and the end of the 11th FP at the top right are
forecasts.
5. “Ratio of fixed interest rate” refers to the ratio of the balance of interest-bearing liabilities with fixed interest included in the balance of interest-bearing liabilities as the date of disclosure.
6. “Average remaining time to maturity” refers to the period determined by the weighted average, based on the balance of each interest-bearing liability, of the period until the repayment date or redemption date of each interestbearing liability as the date of disclosure.
■ (Bottom left figure) Distribution Map of Average Financing Interest Rates and Average Remaining Time to Maturity of Office J-REITs
1. “J-REIT” refers to a listed real estate investment corporation, and “Office J-REITs” refers to J-REITs with an office building rate (*) exceeding 50% in their portfolio at the end of the most recent fiscal period as of September 30, 2023.
(*) “Office building rate” is the percentage (on acquisition price basis) of “office buildings” included in an investment corporation’s entire portfolio. The same applies below.
2. Uses the figures for the most recent fiscal period of “Office J-REITs” as of September 30, 2023.
3. The dotted lines in the graphs are straight lines approximating the relationships between “average financing interest rate” and “average remaining time to maturity” for Office J-REITs that are statistically calculated to minimize thesum of the error (distance between the anticipated line and the coordinates of the distribution) using the least-squares method
Page 32■ (Bottom figure) Maturity ladder1.
“Maturity ladder” refers to a diagram that aggregates the amounts of each interest-bearing liability for a certain period by maturity date and lists these in order of time.
Page 35
1. “GRESB” is the name of an annual benchmark assessment measuring consideration for the environment, society and governance (ESG) in real estate companies and funds, and the organization that manages this. It was founded in2009 by a group of major European pension funds leading the Principles for Responsible Investment (PRI).
2. “DBJ Green Building Certification” is a certification system established by Development Bank of Japan Inc. (DBJ) in April 2011 to support properties that give proper care to the environment and society (Green Building). Besides theapplicable properties’ environmental performance, based on comprehensive evaluation, including various efforts for stakeholders, such as consideration to disaster prevention or local communities, it evaluates and certifies realestate needed for society and economy and supports those initiatives.
Page 36■ Environment
1. “DBJ Green Building Certification” was obtained by The Sankei Building Co., Ltd. for Tokyo Sankei Building and BREEZÉ TOWER
2. “BELS”, the Building-Housing Energy-efficiency Labeling System, is a third-party evaluation system that evaluates energy-saving performance of buildings based on evaluation standards set by the Ministry of Land, Infrastructure,
Transport and Tourism. The same applies below.
3. CASBEE for Real Estate was developed to utilize the results of the CASBEE* environmental assessment of buildings in real estate evaluations. Buildings are assessed in five categories — Energy/GHG, Water, Materials,
Biodiversity/Sustainable Site, and Indoor Environment — and each is assigned one of four ranks — S, A, B+, or B.
(*) CASBEE, or Comprehensive Assessment System for Built Environment Efficiency, is a system that comprehensively evaluates the quality of buildings that are environmentally friendly by introducing materials that are effective forenergy saving and have low environmental burden as well as the comfortableness of indoor areas and appearances of buildings. In April 2001, with the support from the Housing Bureau of the Ministry of Land, Infrastructure,
Transport and Tourism, the Comprehensive Environmental Assessment Research Committee for buildings was established as part of joint projects of government, industry and academia. Since then, it has implemented
developmental and maintenance activities in a continuous manner.

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Notes
Page 46
1. The actual values of NAV per unit in each period are calculated as follows.
Actual value of NAV per unit = Net assets per unit(*1) at end of each FP + Unrealized gain (loss) at end of each FP(*2) / Number of investment units issued and outstanding at end of each FP(*3)(*1) “Net assets per unit” is obtained using the following formula. This is simply shown as “Net assets” in the graph. The same applies below.
Net assets per unit = Net assets at end of FP (after deducting distributions at the end of each FP) ÷ Number of investment units issued and outstanding at end of FP(*2) “Unrealized gain/loss at end of FP” is obtained using the following equation. It is referred to as “unrealized gain” if the result is positive and “unrealized loss” if negative. This is simply shown as “Unrealized gain” or“Unrealized loss” in the graph.
Unrealized gain/loss at end of FP = Total appraisal value of assets held by SANKEI REAL ESTATE at end of FP - Total book value of assets held by SANKEI REAL ESTATE at end of FP(*3) “Number of investment units issued and outstanding at end of each FP” is the number of investment units issued and outstanding at the end of each fiscal period.
2. The figures shown on this page are rounded to the nearest unit and percentages are rounded to one decimal place.
Pages 47 and 48
1. Entries with multiple “acquisition dates” indicate additional acquisitions of interest.
2. “PML value” refers to the probable maximum loss ratio in earthquake risk analysis, which is represented by the percentage of the probable maximum loss in relation to the replacement cost (value in the event of reconstructing thebuilding) in the event of the largest anticipated earthquake during the period of use of the building (PML = probable maximum loss / replacement cost x 100).
Page 51
1. “Portfolio matrix” is the balance and distribution of areas and yield, etc. in the overall assets acquired by SANKEI REAL ESTATE. The same applies below.
2. “Cap. Rate” refers to “appraisal NOI yield,” which is the ratio of the net operating income derived by the direct capitalization method shown on the real estate appraisal report against the acquisition price. The same applies below.
3. “Acquisition price” is shown as the transaction price of real estate and trust beneficiary rights shown on the transaction agreement pertaining to each of the acquired assets. The sale and purchase prices do not include consumption
tax, local consumption tax and the various expenses required for the acquisition. The same applies below.
4. “Greater Tokyo” refers to Tokyo, Kanagawa Prefecture, Saitama Prefecture and Chiba Prefecture. The same applies below.
5. “Core cities” refers to cities with a population of 200,000 or more (excluding Greater Tokyo, Greater Osaka and Greater Nagoya, and other cities designated by government ordinance).
6. “Major regional cities” refers to cities that are municipalities with population of less than 200,000 and the Asset Management Company has deemed certain demand can be found for specific asset types.
7. “Typical floorplate” is a typical floor plan in mid- to high-rise buildings. The same applies below.
8. “Investment ratio by geographic area” states the percentage in terms of acquisition price, after categorizing overall assets acquired by SANKEI REAL ESTATE by geographic area.
9. “Investment ratio by asset” states the percentage in terms of acquisition price, after categorizing overall assets acquired by SANKEI REAL ESTATE into office buildings and those other than office buildings
Page 52
1. “Sponsor support rate” is the percentage (on an acquisition price basis) of sponsor-owned properties or those acquired by using sales information on properties owned by third parties provided based on a sponsor support
agreement. The same applies below.
2. “Percentage by Walking Time to the Nearest Station(excluding logistics facilities)” is the percentage, based on acquisition price, of assets held excluding logistics facilities after classifying them by the number of minutes required towalk from the nearest station assuming that it takes one minute to travel a road distance of 80 meters, and the average is the weighted average based on acquisition price of each property of the calculated figures, rounded to one
decimal place.
3. “Percentage by Building Age” is the percentage, based on acquisition price, of assets held after classifying them by building age as of August 31, 2023, and the average is the weighted average, based on acquisition price of each
property, of the calculated figures, rounded to one decimal place.
4. “Percentage by Typical Floorplate (Office Buildings)” is the percentage, based on acquisition price, of assets held of which use is office buildings after classifying them by typical floorplate, and the average is the weighted average,
based on acquisition price of each property, of the calculated figures, rounded to one decimal place
Page 53
1. “Percentage by Contract Form” is the percentage of assets held based on leased area, rounded to one decimal place.
2. “Percentage by Lease Period” is the percentage of assets held classified into “including hotels” and “excluding hotels,” based on leased area, rounded to one decimal place. The average is the weighted average based on leased areaof each property of the calculated figures, rounded to one decimal place.
3. “Percentage by Business Type” is the percentage of assets held classified by tenant business type based on leased area, rounded to one decimal place.
4. “Percentage by Business Type (Manufacturing)” is the percentage of assets held classified by tenant business type within manufacturing based on leased area, rounded to one decimal place.
5. The leased area for properties leased through a master lessee is calculated using the areas stated in the lease agreements concluded with end tenants as the areas leased to the end tenants
Page 54
1. “Total leased area” and “% of portfolio’s total leased area” are based on figures after considering SANKEI REAL ESTATE’s ownership interest.
2. “% of portfolio’s total leased area” refers to the total leased area expressed as a percentage of the entire portfolio’s total leased area, rounded to one decimal place.
3. “Total leased area” and “% of portfolio’s total leased area” for properties leased through a master lessee are calculated using the areas stated in the lease agreements concluded with end tenants as the areas leased to the end
tenants

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